The 60 day period exists for many reasons. One of which is to give the bankruptcy trustee and creditors time to review the case and make sure everything is in order. In most Chapter 7 cases, no issues come up at all, but the court must allow this time before debts can be officially wiped out. It’s simply a safeguard built into the system to make sure the process is fair for all parties involved.
Additionally, the waiting period is when the trustee may finish up any loose ends. This can look like reviewing additional documents if they were requested at the 341 meeting. Once the trustee confirms there are no assets that can be sold, the case moves forward as a “no-asset” case, which is the most common outcome.
This waiting period is also when reaffirmation agreements are finalized. If you choose to keep a car or home loan, sometimes creditors will ask for certain paperwork to be signed and filed before the discharge is entered. If no reaffirmation is filed, the loan is discharged as a personal obligation, even if you continue making payments and keeping the property. Please remember to always check in with your attorney prior to signing these agreements – they are not always necessary.
For most filers, there is very little to do during this time. As long as you respond to any trustee requests and stay current on ongoing obligations, the case usually moves forward without any action on your part.
Once the 60 days have passed and no objections are filed, the court issues the discharge. This is the order that clears unsecured debts like credit cards, medical bills, and personal loans to the extent that it is dischargeable. In most cases, this happens about three to four months after the bankruptcy is filed.
While the waiting period can feel uneventful, it is simply the final step before receiving a fresh financial start. When the time is right, or when you are ready, reach out to Minnesota’s MOST Kind and Helpful bankruptcy law firm by going now to www.lifebacklaw.com . You will be so happy you did.