Can A Bankruptcy Be Reopened?

I heard that you have to file a motion for the case to be reopened, but the question is, what issues in bankruptcy would warrant that request? Just curious.

In a Chapter 7 bankruptcy, the consumer may request the court :

-to have his/her case reopened to file a motion to avoid a lien that he/she was not able to include in the papers or
-to file Form 23 to prove to the court that he/she has completed budget counseling.

Another post-bankruptcy issue that may give rise to the case being reopened is when a consumer learns of a long lost creditor. One that was not included in the discharged case. He/she may request the court to reopen the case so that THAT creditor would also be included in the discharge.

Wait. I'm confused. If the consumer does not request the court to have the case reopened to add a creditor, does that mean that THAT neglected creditor could resume collecting from the consumer?

Also, are there instances in which it is the creditor that asks the court to have the case reopened?

I would say yes to that Jim. The creditor may resume collection if the debt was not included in the discharge. The reason why a consumer would request for the court to have the case reopened-- is for that creditor to be included in the discharge.

I am not sure if filing a motion is necessary if, for example, the creditor feels that the consumer's failure to list him/her was purposeful. This is pertaining to a Chapter 13 case, in which all creditors must be listed in the consumer's repayment plan, whether or not they are able to file what is called a Proof of Claim, for them to be paid by the trustee. Of course the creditor would object to the fact that he/she is not going to be paid.

I haven't heard of a creditor request for a bankruptcy case to be reopened yet but I have heard of creditors disputing the discharge.

The creditor may only resume collection if the debt is nondischargeable/unsecured. What the consumer should have done was to file a Proof of Claim on behalf of a creditor--but that's only if the consumer knows of that creditor's existence and if the consumer thinks that this creditor is interested in asserting that claim. A bankruptcy lawyer would be able to explain cases like this much better.

Assuming that the consumer knows of this creditor, but this creditor was not able to attend the creditor's meeting, the consumer can file a blank Proof of Claim on behalf of that creditor, and attach it to any proof of his/her debt, like a notice of default, mortgage agreement, etc.

In the case of secured creditors, the trustee may not pay them if they fail to file a claim--although if those creditors have a lien on the consumer's property, the lien stays.

Can the creditor object to the reopening of the case?

I think that a creditor in a Chapter 13 case would not object to the case being reopened because he/she would benefit from it...I'm not sure. Reopening the case is not to the advantage of the consumer--it is the other way around.

Also speaking of reopening the case, I learned that the trustee can request the court to have the case reopened if he/she learns that the consumer has a newly discovered property that does not fall under the "nonexempt" category.

I believe you are referring to the trustee's motion to reopen a Chapter 7 bankruptcy to administer assets. Upon learning of the consumer's acquisition of a nonexempt asset the trustee would ask the court permission to liquidate that asset to distribute to the creditors.

Regarding the creditors objecting to the reopening of the case, I suppose they could, if they don't want to be paid through a plan that takes forever to finish or if they are angling after a judgment against the consumer. I really don't know. I believe that we are going to need a bankruptcy lawyer to help us make sense of that complication.

Would the Chapter 7 filing fee also cover the Motion to Reopen Chapter 7? How much would it cost to reopen it?