Reopening a Bankruptcy Case to Fix Mistakes
You have probably heard that it is very important to review your bankruptcy pleadings to ensure that they are true and correct. But, what happens if you later discover a mistake? You should immediately notify your bankruptcy lawyer. If your case is still pending, he or she can take action to correct the error. Even if you case has been closed and you received a discharge order, it may still be possible to reopen your filing and cure the mistake.
The most common reason a judge will allow a debtor to reopen a case is to fix a procedural error. Below are a few examples:
• Debtor’s failure to timely file a counseling certification (Official Form 23)
• Debtor’s failure to follow the proper procedure to remove a judgment lien on debtor’s home
• Debtor’s failure to list an essential creditor in the filing
• Debtor’s failure to disclose a significant asset
• Debtor’s receipt of a windfall of money (trustee may seek to reopen case)
• Any other reason approved by the court
The procedure for reopening a case begins with the debtor or trustee filing a motion with the bankruptcy court requesting permission to reopen the filing. Typically, a filing fee must be paid with this type of motion. It is common for the debtor to seek to reopen the case without being required to provide notice to all of the creditors and without a hearing. In other words, the debtor will ask to only provide notice to those parties being impacted by the relief sought. The motion must also fully explain the mistake that was made and why the case should be reopened. If the judge grants the motion, the case can proceed on the limited issues until they are resolved.
There is no guarantee that the court will grant a motion to reopen a case. Thus, it is extremely important that all debtors closely review their initial filings to avoid this risk, as well as the extra time and additional expense of filing the motion. However, it is comforting to know that if an error was made in your filing, you have the option to seek court permission to fix it.
The personal bankruptcy process can be simple and effortless if you retain an attorney who will explain the steps to you. Ms. Anderson is dedicated to walking you through each step, explaining the process along the way. At The Law Office of Diane Anderson, we are determined to help our clients obtain the best results possible.