Is it Possible to Reopen a Bankruptcy Case?

Upon the issuing of a discharge, your Arizona bankruptcy case is going to be closed. In certain circumstances, however, a bankruptcy case could be closed without a discharge. If this happens, you have the right to ask to reopen a bankruptcy case for court reconsideration.

Situations in Which it is Possible to Reopen a Bankruptcy Case

Your bankruptcy case could be reopened under the following circumstances:

  • Whenever the court has to give the debtor a certain kind of relief
  • For the purpose of court administration of additional property or assets
  • If the debtor can demonstrate there is another, valid reason for the reopening of the case

The debtor is one of the parties that can file a motion for having the bankruptcy case reopened. The trustee has the same right. Third parties that have interest in the bankruptcy proceedings can also file a motion for case reopening.

Most often, case reopening occurs to correct a mistake that prevented the discharge the first time around. Failing to file one of the required documents or licenses is a possible reason for requesting reopening.

If you have accidentally forgotten to disclose an asset or you want to add some debt that was forgotten the first time around, you can also request the reopening of the bankruptcy case.

What it Takes to Reopen a Bankruptcy Case

The reopening procedure is fairly simple, especially if you have hired a bankruptcy attorney to guide you.

The document needed for bankruptcy case reopening is a motion that explains why the case was closed prematurely the first time around. If the court grants the additional motion, several additional documents will have to be filed. The nature of these documents depends on the reason why reopening was requested.

If you have forgotten to file a course certificate, for example, you will need to file a motion for additional time that will allow you to submit the missing Form 423 Certification about Financial Management Course. The second document will be required to ask the court to reconsider your bankruptcy and enter a discharge.

Because the reopening is often a pretty simple endeavor, courts in Arizona will generally allow for the filing of the motion to occur ex parte (without informing other parties about the upcoming change in the status of the bankruptcy filing).

When can Trustees Request Bankruptcy Case Reopening

As already mentioned, trustees and third parties could also request the reopening of the bankruptcy case.

The main difference between a debtor and a trustee asking for a reopening is that the second party (as well as creditors) will file a motion whenever a discharge is granted.

Most often, trustees ask for the case to be reopened whenever they find assets that the debtor did not disclose in the very beginning. Other common causes of such motions include a serious mistake the first time around and prejudice due to the lack of bankruptcy notice.

reopen a bankruptcy caseThere could also be brand new circumstances that will change the terms and the conditions of the bankruptcy. Inheriting property or a large sum of money will usually provoke the trustee to move for the reopening of the bankruptcy case.

Whenever trustees or creditors come across evidence of bankruptcy fraud, they’ll also be given the right to request a reopening of the case.

A bankruptcy trustee doesn’t have the power to reinstate the case. They will need to take matters to the US Trustee office, after which a motion will be filed with the Arizona court. The debtor has the right to oppose the motion. Most often, this happens if the debtor believes that the respective asset should not be liquidated.