Under Chapter 7 bankruptcy, most of your consumer debts are discharged by a court order within approximately six months from the filing of your petition. This discharge is important because it legally wipes away any claims that creditors have that you owe money on a debt so long as you identified the debt as part of your bankruptcy case. However, if you failed to identify a creditor as part of your case, you may be able to reopen the case under certain circumstances.
Motion to Reopen
Under the U.S. Bankruptcy Code, a closed bankruptcy case may be reopened at the request of the debtor, "other party in interest," including a creditor, or at the request of the trustee. To reopen a case after a discharge is granted, a written motion must be filed with the bankruptcy court stating the reasons for reopening the case. The court also requires the person who files the request to reopen to also pay a court filing fee.
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A primary reason you may want to reopen your bankruptcy after you obtained a Chapter 7 discharge is because you forgot to list a debt in your bankruptcy disclosures. If you did not have any assets sold off from your estate to pay creditors, the court is likely to allow you to reopen your bankruptcy to include omitted debts. However, if some of your assets were used to pay a portion of your debt to some creditors, then reopening your case to discharge newly remembered debts may be difficult.
Creditor Injunction Violations
Another reason you may wish to reopen a closed bankruptcy is to file a lawsuit against a creditor if it violates the court injunction that prohibits it from trying to collect a debt that was discharged in your bankruptcy. If the court discharges the debt, it is unlawful for the lender to make any attempts to get you to pay the debt. If a creditor begins harassing you to repay any debts that were discharged, you have the right to reopen your bankruptcy case in order to enforce the court-ordered injunction and seek money damages from the creditor.
Your bankruptcy may be reopened by the trustee or your creditors if there is evidence that you were fraudulent in your bankruptcy filings or untruthful in your testimony during the meeting with the trustee and creditors. If the trustee learns that you attempted to hide assets from him, the court could reopen your case, seize the asset, revoke your discharge of indebtedness, impose civil fines and refer you for criminal prosecution.
- United States Courts: Chapter 7
- National Bankruptcy Forum: Understanding the Bankruptcy Discharge
- Sulaiman Law Group: Considerations When Reopening a Chapter 13 or Chapter 7 Bankruptcy
- Law Office of Heather A. Cutler: What If I Forgot To Include A Debt In My Bankruptcy?
- U.S. Department of Justice: The Law of Reopening: Revisited
- Long Island Bankruptcy Blog: The Inadvertently Omitted Creditor in a Closed Chapter 7 Bankruptcy Case
- Chapter 7 Attorneys: North Carolina Bankruptcy Reopened to Pursue Discharge Violation Claim
- Northern Ohio Bankruptcy Information: What Happens When You Lie In Bankruptcy
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