Reopening a Bankruptcy Case

Bankruptcy, by definition, is a legal process that deals in large part with numbers. Debt figures, income levels, number of people in a household, trustee payments - you name it - all deal with numbers. An extension of this is in deadlines. Most stages of the bankruptcy process deal with dates set in advance, with requirements that must met by those dates. This can include a meeting of creditors with the various requirements due by that date, or a confirmation hearing, and the various requirements due by that date in order for a case to be recommended for confirmation.

A lot of these also deal with requirements that are due by the discharge date in your bankruptcy. Failure to complete these requirements, such as an affidavit of domestic support obligations in a Chapter 13 or completion of a personal financial management course in both a Chapter 13 and Chapter 7, can cause your case to be closed out without a discharge. This would necessitate a motion to be filed by your attorney to reopen your bankruptcy case to secure those requirements for discharge.

A debtor can also, by and through their attorney, move the bankruptcy court to reopen their case to add a prepetition debt that they would like discharged, or to file a motion in regards to their case that they feel should have been done before. A good example of this is a motion to reopen a bankruptcy case to avoid a judicial lien on real estate. This particular lien is often overlooked during the active bankruptcy because debtors usually discharge the underlying debt through the bankruptcy without either even looking to see if there is a lien on the property or mistakenly thinking that the bankruptcy discharge removes the lien. If the lien has been recorded, even a discharge of the debt does not invalidate the lien, meaning that down the road, if the debtor goes to sell the property, they would have to pay off the lien with part of the proceeds.

As a result, it is highly recommended that a Chicago bankruptcy lawyer is hired to first ensure that all necessary matters are taken care of prior to discharge and before any hard and fast deadlines, and second to file the necessary motions to reopen the case if need be.