What is a Notice of Filing Report of No Distribution?

Report of No Distribution

I am often asked about what a “Notice of Filing Report of No Distribution.” Almost all Chapter 7 debtors will receive such a notice in their Chapter 7 Bankruptcy case. It is an important document that has big implications for your bankruptcy.

As I discussed a few weeks ago, some Chapter 7 cases are “asset” bankruptcies, while most are “no-asset” bankruptcies. In no-asset Chapter 7 cases, the bankruptcy trustee will issue a report that specifies certain information about his or her administration of the bankruptcy.

This “no asset report” is important because it tells all interested parties that there will be no distribution of funds from the debtor’s bankruptcy. A creditor needs this information to know whether they can expect to receive any funds from the bankruptcy trustee.

Once the no-asset report has been issued, the debtor will also be confident that the bankruptcy trustee will not be attempting to seize any of their property. The most common item taken from a debtor in a Chapter 7 is a tax refund. When the report of no distribution comes out, the debtor will know that their case is proceeding without any need for turning over property to the trustee.

The report also contains an important deadline that creditors must follow. The report provides for a “last day to file an objection.” Importantly, this objection deadline is NOT the deadline for a creditor to object to the bankruptcy itself. Rather, it is a deadline for creditors that want to object to the trustee’s no distribution report itself. Many clients confuse this deadline with the deadline for creditors to object to the bankruptcy or the discharge of specific debts.

Please contact Sacramento Bankruptcy Attorney Rick Morin for more information regarding Chapter 7 or Chapter 13 bankruptcy. The office phone number is (916) 333-2222.