Reopening a Bankruptcy Case
Learn when you might need to reopen a bankruptcy case, and how to do it.
If you file bankruptcy, the court will close your case after you have completed all the case requirements and received a discharge. The court may also close your case without issuing a discharge if it has dismissed the case or if you failed to do something important during the case. However, you can reopen your case if you forgot something important, even if the court has entered your discharge.
Here's when you can reopen your case, and how to do it.
Reasons to Reopen a Bankruptcy Case
Here are some of the common reasons you might need to reopen your bankruptcy case.
You Failed to File Your Credit Counseling Certificate
Every bankruptcy debtor is required to take a pre-bankruptcy credit counseling course before filing a case, as well as a post-bankruptcy course after filing. Once you take the course, you must file a certificate with the court showing that you took the course. If you fail to file this certificate, the court may close your case without a discharge. Fortunately, you can reopen your case for the purpose of filing this certificate.
(To learn more, see Credit Counseling & Debtor Education Requirements in Bankruptcy.)
You Failed to List an Asset
When you file bankruptcy, you must file a schedule listing everything you own, including property you are entitled to but have not yet received. (To learn more, see Completing the Bankruptcy Forms.)
If you fail to list valuable property in your schedules and the case is closed, you must reopen the case and file amended schedules listing the property and exempting it. The trustee may also reopen the case for this purpose.
Example 1. If your name is on the title to a vehicle but you forgot you owned it because your brother drives it, and the bankruptcy court discharges and closes your case without your disclosing the vehicle, you will need to reopen the case to disclose your ownership interest in the vehicle.
Example 2. If you get hurt before you file for Chapter 7, or before or during a Chapter 13, the proceeds from any personal injury claim or lawsuit (whether from a judgment or settlement) becomes part of the bankruptcy estate, subject to any applicable exemptions. You are required to list any potential claim (even if you haven't yet filed a lawsuit) in your bankruptcy papers. If you don't, and your bankruptcy case is closed, you should immediately reopen your case to add the claim or lawsuit. Otherwise, the defendant in your lawsuit could try to dismiss the lawsuit on the basis that the bankruptcy trustee should have been the plaintiff, not you. Also, purposeful failure to disclose property in your bankruptcy schedules is an act of fraud as well as perjury (you sign your paperwork under oath).
You Failed to List a Creditor
If you fail to list a particular creditor in your bankruptcy paperwork, that creditor will not receive notice of the bankruptcy and may attempt to collect after the case is closed and discharged. You can reopen your case to add the creditor. In a Chapter 7 case, this may cause your case to linger several months longer to allow the added creditor time to object to discharge. In a Chapter 13 case, this may mean you will have to pay more money to provide that creditor with the percentage to which it is entitled.
How to Reopen a Bankruptcy Case
You can reopen a bankruptcy case by filing an ex parte motion that describes why you want to reopen the case. An ex parte motion is a motion that the judge will review right away without notice to any other parties. You must submit a proposed order with the motion. Once the court enters the order, you must act quickly to take the measures you proposed to take in the motion.