Chapter 13 Trustee Discharge and Order Closing the Case

Chapter 13 discharge and case closing happen in that order and are two separate events: after you make your final plan payment, the trustee audits the case and files a final report, the court enters a discharge order that wipes out remaining qualifying debts, and then, once the trustee’s administrative work is finished, the court enters a separate order formally closing the case. The whole wind-down usually takes several months from your last payment.

The Final Payment and the Trustee’s Final Report

Your last plan payment is not the finish line by itself. The trustee has to confirm that every required amount has been received, including any tax refunds the plan captured, and then conducts a final audit. Once satisfied, the trustee files a Certificate of Final Payment with the court.

Within roughly 150 days after that certificate, the trustee files a Final Report. The report details every dollar collected under the plan, how it was distributed among creditors, which claims were paid in full, and which received only partial payment. It also accounts for the trustee’s compensation, which comes out of your plan payments and is capped by federal law at 10 percent of the amounts collected.¹

What You Have to Do Before the Court Will Discharge You

Two obligations sit between you and your discharge, and missing either one is the most common reason a discharge gets delayed or denied.

First, you must complete a post-filing instructional course on personal financial management.² This is separate from the credit counseling briefing you took before filing. If the case closes without the certificate on file, you’ll have to reopen the case and pay a fee to get the discharge entered.

Second, if you owe domestic support obligations, you must certify that all amounts due through the certification date have been paid.³ Child support and alimony aren’t dischargeable, and being current is a precondition to getting the discharge at all.

The Discharge Order and What It Does

When the trustee’s final report is filed and the court is satisfied that every plan requirement has been met, the bankruptcy judge enters the discharge order. The order releases you from personal liability on all debts the plan provided for, except for categories the law specifically excludes.⁴

The discharge is a permanent injunction. Creditors of discharged debts cannot sue you, call you, send letters, or contact you in any other way to collect.⁵ The court clerk mails copies of the order to all creditors, the U.S. Trustee, the case trustee, and your attorney. Keep your copy permanently. Years later, if a debt buyer tries to collect on something that was discharged, that order is your proof the debt is legally unenforceable.

Debts That Survive the Discharge

A completed Chapter 13 discharge is broader than a Chapter 7 discharge, but it still leaves several categories of debt intact.

Domestic support obligations. Child support and alimony are not discharged and must be current for the discharge to be granted.
Certain tax debts, including taxes from fraudulent returns, taxes you tried to evade, and taxes for which a late return was filed less than two years before the petition.⁶
Government-backed and qualified private student loans, unless you file a separate adversary proceeding within the bankruptcy case and prove undue hardship. The Department of Education updated its guidance in 2024 on how it evaluates hardship claims, but the legal standard remains demanding.⁷
Debts obtained through fraud, false pretenses, or misrepresentation, if a creditor asks the court to except the debt from discharge.
Criminal restitution and fines included in a sentence.
Debts for death or personal injury caused by driving while intoxicated.⁶
Civil damages for willful or malicious conduct that caused personal injury or death. Debts from willful or malicious damage to property, by contrast, can be discharged in a completed Chapter 13, which is one place Chapter 13 gives you broader relief than Chapter 7.⁴

Liens Are Not Erased

The discharge eliminates your personal obligation, not the creditor’s lien on your property. Your mortgage lender can no longer sue you personally for the balance, but the lien is still attached to the house. Stop paying and the lender can still foreclose, because foreclosure enforces the lien against the collateral rather than against you.

Chapter 13 plans can reduce what you owe on some secured debts by writing the secured claim down to the collateral’s current value and treating the rest as unsecured, but this generally isn’t available for a primary residence mortgage.³ Whatever wasn’t stripped or modified during the plan remains enforceable against the property after discharge.

What Happens to Co-Signers When the Case Closes

While your Chapter 13 case is open, the co-debtor stay protects anyone who co-signed a consumer debt with you. Creditors cannot pursue your co-signer for debts the plan addresses.

That protection ends when the case is closed, dismissed, or converted to Chapter 7.⁸ If the plan paid the co-signed debt in full, that doesn’t matter. If it only paid part of it, the creditor can pursue your co-signer for the unpaid balance once the stay lifts. Your discharge protects you, not the person who signed with you.

The Order Closing the Case

After the discharge is entered and the trustee has completed all administrative duties, the court enters an order formally closing the case. Closing means every motion has been ruled on, every distribution has been made, and the trustee has confirmed that all trustee responsibilities are finished.⁹

Closing is not the same as discharge. A case can close without a discharge if the debtor failed to meet a requirement, and a discharge can be entered while the case remains open if the trustee still has work to finish. Once the closure order is entered, the trustee is released from duty and the court’s active oversight of the case ends.

If You Cannot Finish the Plan

Not every Chapter 13 ends with a completed plan. If yours can’t, you have three paths.

You can ask the court to dismiss the case, and the court must grant dismissal so long as the case wasn’t converted from another chapter.¹⁰ Dismissal does not give you a discharge. Creditors regain the right to collect, paused interest gets added back to your balances, and foreclosures, repossessions, and garnishments can resume. You get credit for what the trustee already distributed, but the rest is fully enforceable.

You can also convert to Chapter 7 at any time. That liquidates your non-exempt assets, and you receive a Chapter 7 discharge instead. The court can force either dismissal or conversion for cause, such as missing payments or defaulting on a confirmed plan.

A hardship discharge is the third path. If circumstances beyond your control prevent you from finishing and modification won’t fix the problem, the court can discharge you even though you didn’t complete all payments. Three conditions must be met: the failure to pay isn’t your fault, unsecured creditors have already received at least as much as they would have in a Chapter 7 liquidation, and further plan modification isn’t practical.² A hardship discharge covers fewer debts than a completion discharge, because the full range of general non-dischargeable debt categories applies rather than the narrower Chapter 13 list.⁶

After the Case Closes

Clean Up Your Credit Report

A Chapter 13 filing can remain on your credit report for up to 10 years from the filing date.¹¹ Individual accounts included in the bankruptcy should show a zero balance after discharge, but bureaus don’t always update promptly.

Pull your reports from all three major bureaus once the case closes. Check every account that was part of the plan. If a discharged debt still shows an outstanding balance or active collection, dispute it with both the bureau and the furnisher, and attach a copy of your discharge order. The bureau must investigate, and the furnisher has 30 days to respond.¹²

Keep your discharge order, the trustee’s final report, and your plan completion records indefinitely. If a debt buyer purchases old accounts years from now and tries to collect, those documents are your proof.

Handle the Tax Side

Canceled debt is normally taxable income outside bankruptcy. Debt discharged in a Title 11 case, including Chapter 13, is excluded from your gross income entirely.¹³ You report the exclusion by attaching Form 982 to your federal return for the year of the discharge, checking the box for Title 11 bankruptcy and entering the discharged amount. The exclusion requires you to reduce certain tax attributes such as net operating losses or credit carryforwards, though for most individual filers the practical effect is minimal.¹⁴ Forgetting Form 982 doesn’t make the debt taxable, but it can prompt an IRS inquiry if a creditor issues a 1099-C.

Reopening a Closed Case

A closed case isn’t always final. Federal law lets the court reopen a case to administer assets, grant relief to the debtor, or for other sufficient cause.¹⁵ Common reasons include getting a discharge that wasn’t entered before closure (usually because the financial management course was missing), pursuing a creditor who violates the discharge injunction, or dealing with an overlooked asset.

Reopening requires a motion and a court fee of $235.¹⁶ The court has discretion, so the reason needs to be specific. Reopening doesn’t restart the automatic stay or create a new repayment plan. It lets the court address the narrow issue that prompted the motion.

1
Office of the Law Revision Counsel. 28 USC 586 – Duties; Supervision by Attorney General
2
Office of the Law Revision Counsel. 11 USC 1328 – Discharge
3
United States Courts. Chapter 13 – Bankruptcy Basics
4
Office of the Law Revision Counsel. 11 USC 1328 – Discharge
5
United States Courts. Discharge in Bankruptcy – Bankruptcy Basics
6
Office of the Law Revision Counsel. 11 USC 523 – Exceptions to Discharge
7
Federal Student Aid Knowledge Center. Undue Hardship Discharge of Title IV Loans in Bankruptcy Adversary Proceedings
8
Office of the Law Revision Counsel. 11 USC 1301 – Stay of Action Against Codebtor
9
United States Bankruptcy Court. Dismissal, Conversion and Closing of a Bankruptcy Case, What Are the Differences Between Them
10
GovInfo. 11 USC 1307 – Conversion or Dismissal
11
Office of the Law Revision Counsel. 15 USC 1681c – Requirements Relating to Information Contained in Consumer Reports
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Consumer Financial Protection Bureau. How Do I Dispute an Error on My Credit Report
13
Office of the Law Revision Counsel. 26 USC 108 – Income From Discharge of Indebtedness
14
Internal Revenue Service. Publication 4681 – Canceled Debts, Foreclosures, Repossessions, and Abandonments
15
Office of the Law Revision Counsel. 11 USC 350 – Closing and Reopening Cases
16
United States Courts. Bankruptcy Court Miscellaneous Fee Schedule