Like most Chapter 13 bankruptcies, your case is usually closed after the payments and obligations set out in your repayment plan have been completed. After that, your remaining debts are usually discharged.
Most of the time, this means your bankruptcy is over. There's no need to look back and it's time to enjoy the fresh start bankruptcy gives you. Sometimes, however, a case needs to be reopened.
Reason for Reopening
There are a number of reasons why you, or the bankruptcy trustee, might reopen your case, including
- Discovery of assets not administered by the bankruptcy court
- Amending your schedule or list of creditors or your repayment plan
- Granting you a discharge or other relief
- Any other reason approved by the court
Discovery of Unadministered Assets
The discovery of unadministered assets is a good enough reason for the court to reopen your case. Unadministered assets are items discovered or found after the bankruptcy case was closed that were not considered by the bankruptcy court. They must be assets that were unknown to you and the trustee when the case was closed.
For example, if you unexpectedly receive an inheritance or life insurance payout after the case is closed, the trustee might ask that the case be reopened so the asset can be administered. The new asset may be added to your bankruptcy estate, which could result in changes to your repayment plan.
Changes to Schedules
You may want to reopen your case to amend your schedule or list of creditors to include an additional creditor. This happens quite frequently. For example, you make an honest mistake and forget to list a creditor and debt you owe - like a long forgotten landlord. Months after the case is closed, the landlord shows up demanding payment.
You can ask the court to reopen your case so the landlord can be added to your schedule and the debt included in your repayment plan. So long as the landlord isn't harmed by the delay in being listed on your schedule, the court will usually reopen and add the creditor.
Similarly, you may want to reopen the case to avoid a lien. The bankruptcy laws let you cancel or set aside a lien that would harm property you kept under the repayment plan. Again, unless the creditor/lienholder is harmed by not being listed on your schedule, a lien generally will be set aside.
Discharge or Other Relief
Sometimes a case is closed before a repayment plan is completed or a discharge is granted. This may happen if you didn't complete the required personal financial management instructional course. You may have your case reopened by proving to the court you've completed the course.
Another common reason to request reopening is to stop a creditor who continues collection efforts on a debt listed in your repayment plan. The court can order the creditor to stop collection efforts.
For Other Causes, as Approved by the Court
In addition to the specific causes of the need to administer assets or to give you relief, the bankruptcy court may reopen a case for other cause. For example, you may want to reopen your case to have the court decide whether a lien against some of your property is valid. The trustee may want to reopen your case if he discovers you didn't list all of your property in your repayment plan.
The bankruptcy laws don't define other cause, so generally it's up to the court to decide if the reason given is good enough to reopen the case.
Questions for Your Attorney
- Does it cost anything to reopen my Chapter 13 bankruptcy?
- Can a creditor stop me from reopening my bankruptcy?
- Do I have to tell the bankruptcy trustee if I win money playing the lottery or at a casino after my bankruptcy case is closed?