To legally claim bankruptcy, you must file a lengthy petition with the bankruptcy court and follow extensive laws. Part of your responsibility as a filer is to understand the terminology relating to your case. If you see a notation of "close pending" on your Chapter 13 bankruptcy case, that is usually a good sign. However, it could also mean your case has been thrown out of court.
Chapter 13 Bankruptcy Plan
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Unlike the more streamlined Chapter 7 bankruptcy, a Chapter 13 bankruptcy case can be a long, drawn-out affair. When you file Chapter 13, you work out a plan with the bankruptcy court whereby you repay your creditors some or perhaps even all of the debt that you owe. The court requires that you make those monthly payments for years, usually at least three and as many as five. When you have satisfied the court's payment requirements according to your Chapter 13 plan, along with certain other administrative requirements, you can finally receive notice that your case is closed.
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Close Pending
Close pending is a legal term that actually means the same thing both inside and out of the courthouse. If the close is pending in your Chapter 13 case, it means that something in the case has triggered the end of the case to arrive. If the close of your case is pending, it typically means that your case will be officially over after some administrative processing.
Discharge Vs. Closing
Although discharge and closing often occur in close chronology in a Chapter 13 bankruptcy case, they are not the same thing. Earning a discharge in your Chapter 13 case means that you have paid off your creditors as you agreed you would with the court, and any remaining debt existing outside of that plan is no longer valid. For example, if the court agreed to let you pay $1,000 per month for a 60-month plan, but you had $100,000 in debt, you are no longer liable for the remaining $40,000 in debt after you receive your bankruptcy discharge. Closing, as opposed to discharge, is the formal end to the case, after which no changes are usually entered into the court record.
Premature Closing
In a standard Chapter 13 bankruptcy, closing comes soon after discharge. However, if you failed to make your payments or otherwise did not follow court orders, the court may dismiss your case and close it without granting a discharge. In this case, "close pending" is not a good notation, since it means your case will soon end without you receiving any relief from your debts. You might also receive a close pending notice if you voluntarily convert your case to another bankruptcy chapter, such as Chapter 7.