Question Acquiring credit after discharge date

[Zombie13]

Ok; as we get close to being done with this, we have some questions:

I believe this has been answered before but: we can *legally* acquire credit (i.e. credit card, credit union loan, and yes, possibly a 401K loan) the day after the discharge. Is this correct? I believe shipo recommended waiting 6 weeks after the discharge date to apply for credit.

Asking this to satisfy my curiosity: if a 401K loan were to be initiated before the discharge, could that an issue with the trustee and the bankruptcy? Could they seize the money? I think it would be a problem, definitely, considering, yknow... the whole 'Draconian' thing... .

So, applying for credit has nothing to do with the closing date. Is this correct?

Also: will we receive notification of the discharge date beforehand, via email/phone from the attorney, or a letter from the court?
Or, will we only find out after the fact?

[dieselman]

You can get a credit card today if your approved by a credit card issuer.
Take your tinfoil hats off, your Trustee is not spying on you.

[shipo]

I believe the best answer to your question is one you don't want to hear; it depends...

In some localities you can apply for credit during a Chapter 13, in other places, nope, not a penny of credit until discharge.
Regarding the 6-week wait I recommended, it has nothing to do with what is legal; I recommended that time frame to allow all of the credit bureaus to catch up and have your reports accurately reflect your discharged status. As I've written before, I was stupid and applied for a credit card a few days after my discharge, DENIED! A few weeks later and APPROVED for the same card.
As for pre-notification of discharge, here was my timeline:

• 07-Feb-2020 - My final payment was posted by my Trustee
• 19-Feb-2020 - I received a "Debtor's Affidavit Regarding Discharge"; I was required to:
  • Attest I didn't owe any domestic support payments
  • Attest I was unaware of any reason why I shouldn't be granted a discharge
  • Sign my attestation in the presence of a Notary Public and have it officially Notarized
  • Returning my attestation to the court via my attorney
• 20-Feb-2020 - I submitted my Notarized affidavit.
• 04-Mar-2020 - I received a copy of "Chapter 13 Trustee's Interim Report & Request for Debtor's Discharge" which included language which stated:
  • "The above-captioned Debtor has fully complied with his payment obligations pursuant to the Order Confirming his Plan, has filed the Financial Management Course Certificate, and has filed his Affidavit of Compliance With Discharge Requirements, and is entitled to a discharge pursuant to 11 U.S.C. § 1328(a)."
• 05-Mar-2020 - I received a copy of the "Order of Discharge" for my case (dated 04-Mar-2020)

[Zombie13]

You can get a credit card today if your approved by a credit card issuer.
Take your tinfoil hats off, your Trustee is not spying on you.

Again, based on our specific bk process, we feel it's best to avoid complications until we are free and clear of the bankruptcy. I believe that is after the discharge.
This is how I see this:
Assume I get credit, and make monthly payments.
Trustee could say: "oh, you have money to make monthly payments on a credit card which you didn't report to us. That means you have more disposable income. That means I could raise the payment. Oh and by the way, looks like you didn't learn your lesson. I'm going to file a motion to dismiss your case, because I can. I may not win, but I can try."
Plus, our attorney appeared to be, how should I say it... scornful about acquiring credit during the bk. Most likely, to help us avoid any trouble with the trustee.
This is why we are not interested in credit now; and besides, we don't think it would help our credit scores at this time. Folks in the know, feel free to correct me if I am wrong.
No, the trustee is not spying on us but, the trustee has requested the tax returns, and latest pay stub, annually. So, while they were not 'spying', they were inquiring once a year into our finances, per their right and duty (ie it's their job), in order to determine if they could get more money from us.
While I am thinking about it, I am curious whether the trustee has authorization to request a credit report. Yes, this is a 'what if' question. It's not drama, and no it is not overthinking LOL. It's educational. For us, possibly for you and others as well.

[dieselman]

I would suggest a hobby other than your BK13....

[Zombie13]

It's not a hobby. I would suggest you be more helpful and supportive of others on here.
Have a nice life.

[Zombie13]

Thank you shipo . No, we are happy to hear, what we need to hear. It's important. The detailed explanation is much appreciated. This is the kind of information you don't get before the discharge, unless you ask. So thank you!

So, once we get the copy of the "Order of Discharge" for our case, the trustee should no longer have jurisdiction over our estate. Meaning, the trustee cannot attempt to dismiss the case, request tax returns and pay stubs. And, we can request credit (although waiting to allow all of the credit bureaus to catch up and have your reports accurately reflect your discharged status is recommended). , etc. Is that correct?

We hope others also learn from this particular question and answer thread.

[Barbisi]

Thank you for the very detailed time line of your discharge ,shipo!
The one thing I didn't know about is the need to visit a notary public -I thought you just sent an E-mail back swearing you didn't have any domestic support obligations, and of course that you had filed your second course with the court. ( When quizzed about the second course by us last year, our attorney insisted we had already done the second before we filed; he even sent a copy showing the date, so hopefully we won't need to do that again.(I remember reading where you posted a while back that you went ahead and redid yours because you forgot. LOL)
We will try to make the last payment early but dependent on what expenses we incur before Jan.2022 (like my husband's car repair (struts) or God forbid, the furnace) we may have to wait until the final week of January when we would pay it normally.
I didn't know cabin fever and being stir crazy actually existed until this BK13 began -now some days I really think I'm going nuts like a caged animal!
Whether this ends in March or May, it could never come to a close soon enough for me!

[shipo]

So, once we get the copy of the "Order of Discharge" for our case, the trustee should no longer have jurisdiction over our estate. Meaning, the trustee cannot attempt to dismiss the case, request tax returns and pay stubs. And, we can request credit (although waiting to allow all of the credit bureaus to catch up and have your reports accurately reflect your discharged status is recommended). , etc. Is that correct?

I'm no legal expert, but my understanding of the term "Discharge" is unless fraud or some other rare circumstance is discovered post-discharge, the only remaining duties of the Trustee are to make sure all of the money you've paid has been disbursed to your creditors; literally every penny needs to be accounted for. Once his/her final accounting is complete, which can take several months post-discharge, your case is closed.

[Zombie13]

got it, thanks