The Coronavirus (COVID-19) pandemic has affected even the New Jersey Bankruptcy Court normal process of entering a discharge in a Chapter 7 Bankruptcy case. We applaud the New Jersey Bankruptcy Court for taking prompt and reasonable steps to ensure the safety of those who access the federal court systems. Even smart and safe acts to protect the public health disrupt the normal Court process.
Bankruptcy Court Response to Coronavirus (COVID-19)
Beginning as early as March 16, 2020, the New Jersey Bankruptcy Court made changes and accommodations to align with public health and safety concerns. The Court entered a General Order Regarding Court Operations Under the Exigent Circumstances Created by Coronavirus (COVID19).
The Court implemented the following changes:
- Chapter 13 Bankruptcy Creditors Meetings conducted via videoconference.
- Chapter 7 Bankruptcy Creditors Meetings are taking place via phone or video conference.
- Court appearances via telephone appearance.
- Certain dates and deadlines provided in the Bankruptcy Code and Rules modified or extended.
Chapter 7 Bankruptcy Deadlines to Object to Discharge
Under the March 19, 2020, General Order, the New Jersey Bankruptcy Court provided that:
- Any deadline to object to discharge or to the dischargeability of debt that would otherwise expire prior to April 16, 2020 is hereby extended to 30 days from the expiration of this order. This extension is without prejudice to the rights of any party to seek further extension;
- Any deadline under 11 U.S.C. § 707 or 11 U.S.C. § 727 that would otherwise expire prior to April 16, 2020 is hereby extended to 30 days from the expiration of this order. This extension is without prejudice to the rights of any party to seek further extension;
In a Chapter 7 Bankruptcy case, a creditor, Chapter 7 Trustee, or United States Trustee, has sixty (60) days from the first meeting of creditors to file a timely objection to discharge. See 11 U.S.C. § 727.
If no creditor or party files an objection within 60 days, the Chapter 7 debtor receives his or her Discharge.
Impact of CORONAVIRUS (COVID-19) on Chapter 7 Discharge
The New Jersey Bankruptcy Court General Order extended the dates for timely filed objections to discharge. Normally, the Bankruptcy Court Clerk would enter a Chapter 7 discharge in those cases. However, the extensions of time to object under Section 727 also delays the entry of Chapter 7 Discharge Orders .
On May 1, 2020, entered a further General Order to address the COVID-19 pandemic. The Court, for obvious reasons, entered new extensions of time to June 1, 2020. This includes the right to object to discharge in a Chapter 7 Bankruptcy case.
So, the Court has not entered a discharge for any Chapter 7 Bankruptcy case where the deadline to object to discharge was set for any date from March 19, 2020 to present.
Assuming the Court does not see a need to implement any further extensions, we expect that the New Jersey Bankruptcy Court will begin entering discharges in these cases after June 1, 2020.