Rant about the end process of a Chapter 13

[anitag1]

I reached the end of my Chapter 13 in June - well, the payment end of it anyway.

One thing that surprised me when reading about "how the end works" is that creditors are still paid via snail mail checks. You'd think they'd mostly be set up with some sort of electronic payment to ensure faster payments and avoid lost ones.

One thing I am reeling over is the amount of time it takes between final payment/final disbursement and getting a discharge. How is there not some universal timeline - like X number of days this must be filed, X number of days that must be completed/filed - and then a set of rules for what happens if all checks haven't cleared and so on, to keep things moving.

I really feel like the trustee can take their sweet time and there is no reason/incentive for them to close a case without these rules. It's like we have no rights, even after coming this far and doing all the right things. It's like we're the lower class that "doesn't matter" - even after completing what is supposed to redeem us.

Sorry - I'm just pretty upset right now. Wanted to make sure all was ok and ask about the end process, so I called my trustee's office. I was nice as pie, had my case number ready, and just said, "It looks like I'm about at the end of my case and just wanted to make sure all was ok and ask about the process and how long it takes." The woman was pretty irritated and told me it would be at least a few more months. I didn't expect to hear that at all. Earlier Googling had brought me to attorney sites that gave timeline of about 60 days. Ugh.

So here I sit, waiting for discharge. I need surgery, and I need to come up with the majority of the $$ before it can happen. It's for cancer, and since cancer isn't an "emergency" no one HAS to do it asap because it isn't (right now) immediately life threatening. Sure, I'll be saving everything that was previously going to the trustee but that is going to take time. Was hoping to get credit to fund the rest of it to get it taken care of asap. I am just flabbergasted that this has to drag on. We're held to strict standards but there's nothing to help us out at the back end of this!

[shipo]

I think there is an ongoing discrepancy between "discharged" and "closed"; as I understand it, and as the end of my Chapter 13 illustrated, the "discharge" has nothing to do with the accounting and clearance of the final round of checks; it has everything to do with you making your final payment. In my case, my final payment was made in early February last year, the payment was posted on NDC a few days later, and four weeks after that, my discharge was ordered. Then came the final accounting to make sure all of the monies had been disbursed; that took upwards of four months, and once done, my Chapter 13 was officially closed.

[anitag1]

Right, but I was told until it is closed I can't open any lines of credit/would have to turn over any inheritances and so on - that the full rules apply until the case is closed in it's entirety. So that still puts it at "several months". I can't believe they can hold you hostage like this.

[shipo]

Right, but I was told until it is closed I can't open any lines of credit/would have to turn over any inheritances and so on - that the full rules apply until the case is closed in it's entirety. So that still puts it at "several months". I can't believe they can hold you hostage like this.

At least some of your information is incorrect; as soon as your discharge is recorded on your credit reports (and for some lenders, even before), you can open as much credit as you qualify for. Last year, by the time my bankruptcy was closed I already had two new credit cards.

Regarding the inheritances, I have no idea on that, maybe justbroke can chime in on this subject.

[justbroke]

Right, but I was told until it is closed I can't open any lines of credit/would have to turn over any inheritances and so on - that the full rules apply until the case is closed in it's entirety. So that still puts it at "several months". I can't believe they can hold you hostage like this.

I'll answer the second one first. Technically, from everything that I have read and research, a case is not over until it is over. Until a Chapter 13 case is closed, the Chapter 13 Trustee could claim an inheritance to be part of the bankruptcy estate. This could be especially true if you were entitled to the property (money) before the discharge and/or close. Since this is such a very rare occurrence for Chapter 13s, you just have to take them case by case and Trustee by Trustee. (Let's just say that I don't know of anyone that won the Powerball while in bankruptcy.)

As for opening lines of credit after discharge, for a Chapter 7 I think it's easier to just wait for the close. Most creditors, that I've started to notice, base everything on the discharge date for new credit accounts, so they seem to go by that date. With that said, applying before the discharge shows on your credit reports will likely result in a bunch of instant denials. Some creditors may deny you if the case is "open" (not yet closed). Still, other creditors will deny you because there is a recent bankruptcy (less than 2 years). Some will not ever let you have an account until there is no record of a bankruptcy on your credit reports (and/or LexisNexis Risk report).