Sometimes after bankruptcy cases are closed or dismissed, debtors will want to reopen them for a variety of reasons depending on the circumstances. Bankruptcy courts have substantial power to grant debtors requests to reopen their cases, so it can be helpful to know when it’s allowed, especially when self-represented debtors’ cases were dismissed due to mistakes that could be fixed with the help of an experienced New York bankruptcy lawyer.
One of the most common reasons debtors seek to reopen their cases is that they neglected to complete the mandatory credit-counseling courses before filing bankruptcy, or they didn’t file the certificate stating they did so on a timely basis. Many self-represented debtors make this mistake, and the consequence is the bankruptcy court will dismiss the case. Debtors who then complete the requirement may be able to convince the bankruptcy court to reopen their cases and proceed from there.
Another frequent reason debtors want to reopen their cases is that they accidentally did not list a creditor in their petitions. Sometimes this can occur soon after a dismissal, but other times it happens after they have received a discharge and their cases are closed. For chapter 7 debtors, creditors will need an opportunity to object to the discharge, and chapter 13 creditors may need to be paid a similar portion to what other creditors received.
Third, some debtors do not inform the bankruptcy court of an asset in their possession. They will need to reopen their cases, claim any applicable exemptions, and then the trustee will dispose of the asset. There can be other reasons to reopen a bankruptcy case, but they’re less common, like filing a motion to avoid a lien, fixing other errors in the paperwork, or dealing with a creditor that is violating the discharge order.
To reopen a case, a debtor will need to file a motion with the bankruptcy court and serve it on all creditors and parties of interest. They will also need to pay a new filing fee. At the hearing, they must then convince the court why reopening the case is proper. Because of the court’s broad latitude for reopening a case, debtors with compelling reasons will be successful, but sometimes they won’t be. If your case was dismissed or a problem with your bankruptcy has arisen, then it’s wise to discuss your situation with an experienced New York bankruptcy lawyer to ensure the situation is resolved properly—and you don’t spend more time in bankruptcy than you should.
For answers to more questions about bankruptcy, the automatic stay, effective strategies for dealing with foreclosure, and protecting your assets in bankruptcy please feel free to contact experienced Brooklyn bankruptcy attorney Bruce Weiner for a free initial consultation.