HomeExclusiveCan You Reopen A Bankruptcy Case After Discharge

Can You Reopen A Bankruptcy Case After Discharge

Records Against Property You Own

Can Your Chapter 7 Bankruptcy Case Be Reopened After Your Debt Is Discharged?

To remove the record of your bankruptcy from the Land Charges Register you must do both these things:

Bankruptcy entries are automatically removed from the Land Charges register after 5 years if theyre not renewed. Find out more about what happens when bankruptcy ends on GOV.UK.

When Time Is Tight

The overlooked judgment lien usually pops up when you are ready to sell your home or to refinance it.

Often that means you are working to deadlines.

A motion to reopen and to avoid a lien is likely to take 45-60 days before you have a bankruptcy court order in hand, voiding the lien.

If you find yourself short of time, consider negotiating for the escrow to hold the money that would otherwise go to the holder of the lien when the deal closes, while you go back to bankruptcy court.

If you didnt check the public record before you filed your bankruptcy case to check for judgment liens, do it now. Dont wait for a time crunch.

Thankfully, bankruptcy courts are accustomed to helping with the overlooked lien.

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Common Reasons For Reopening A Bankruptcy Case

There are many reasons why you might want to reopen your closed bankruptcy case. If the court dismissed your case because of a minor procedural mistake , you can ask the court to reopen your case so that you can fix the error and obtain a discharge. But you might also have to reopen your case if you made a significant mistake on your bankruptcy paperwork even if you already received a discharge.

In general, the following are some of the most common reasons you might need to reopen your case:

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    How To Get Student Loans Discharged In Bankruptcy

    You can discharge student loans in bankruptcy if you can prove that repayment would cause you and your dependents an undue hardship. The Bankruptcy Code doesn’t define undue hardship. So bankruptcy courts determine undue hardship by applying a test.

    There’s no uniform undue hardship standard or test.

    Some courts use the Brunner test. Other courts use the totality-of-the-circumstances test. And other courts use a combination of the two or some other test altogether.

    Related:Brunner Test Student Loans: How to Prove Undue Hardship

    No matter which test is used, bankruptcy courts are typically trying to determine whether you can maintain a minimal standard of living while repaying your student loans.

    Because the U.S. Department of Education offers repayment plans based on your income, it’s incredibly difficult to prove you can’t maintain a minimal standard of living.

    Private student loans, on the other hand, typically don’t offer affordable monthly payments based on income. Because of that, you may find it easier to get an undue hardship discharge of your private student loan debt .

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    How Can The Debtor Obtain Another Copy Of The Discharge Order

    If the debtor loses or misplaces the discharge order, another copy can be obtained by contacting the clerk of the bankruptcy court that entered the order. The clerk will charge a fee for searching the court records and there will be additional fees for making and certifying copies. If the case has been closed and archived there will also be a retrieval fee, and obtaining the copy will take longer.

    The discharge order may be available electronically. The PACER system provides the public with electronic access to selected case information through a personal computer located in many clerk’s offices. The debtor can also access PACER. Users must set up an account to acquire access to PACER, and must pay a per-page fee to download and copy documents filed electronically.

    Bankruptcy: Reopening A Federal Bankruptcy Case

    Anne HemenwaySenior Attorney, National Legal Research Group

    There are a variety of reasons why a federal bankruptcy case may be reopened after the debtor has been discharged and the case closed. A debtor may discover a claim, not known at the time the case was pending, and seek to reopen the case to discharge the claim. More typically, a Chapter 7 trustee may seek to reopen a case after discovering potential bankruptcy estate assets that the debtor failed to schedule. The party seeking to reopen may find intense challenges to the motion to reopen, because the reopening can result in a major redistribution of assets. Under the Bankruptcy Code, the bankruptcy court has broad discretionary authority to reopen a case “to administer assets, to accord relief to the debtor, or for other cause.” 11 U.S.C. § 350.

    Recently, in In re Ludvigsen, BAP No. MB 14-039, Bankr. No. 13-12232-WCH, 2015 WL 3733193 , the First Circuit Appellate Panel stated that a bankruptcy court properly exercises its discretionary authority to reopen a closed bankruptcy case when it does so to determine a substantive dispute on its merits, but does not exercise proper discretionary authority when only technical defects with the closed case are at issue. Further, when determining whether to exercise its discretionary authority, the court should look at each § 350 motion on a fact-by-fact basis. Id. at *4 .

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    What Is The Rule Of Abandonment

    Every state has its own definition of abandonment or desertion, but generally, it means that one spouse leaves the family home and the relationship without communicating and without warning. Youll need to check local laws to determine the exact term and definition that applies to divorce in your state.

    How Discharge Affects Your Home

    Can I reopen my chapter 7 bankruptcy case to file a reaffirmation agreement for my mortgage?

    The official receiver has 3 years to take action in relation to your home, this means it wont be affected by your discharge. Your share in your home will become yours again if they haven’t done any of the following within 3 years from the date your bankruptcy order was made:

    • sold your share to someone – like your partner, friend or family member
    • applied to the court for an order that you and anyone else living in your home have to leave
    • applied to the court for a charging order
    • come to an agreement youll pay them the value of your share

    Find out more information about how bankruptcy will affect your home.

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    Can I Reopen My Bankruptcy Case To Discharge A Student Loan

    Bankruptcy expert Leon Bayer answers real-life questions.

    Dear Leon,

    I filed a bankruptcy seven or eight years ago. I asked my lawyer to include my student loan in the bankruptcy. However, my lawyer wouldnt even try to see if we could get it discharged in the bankruptcy. Is it too late to try now?

    You can imagine my frustration that Ive been paying on this loan and will be continuing to pay on this loan until 2023.

    Thanks,

    Sarah

    Dear Sarah,

    Student loans are usually not dischargeable in bankruptcy. However, there are limited circumstances where student loans may be discharged. If you think you qualify for a discharge, you can reopen your bankruptcy case to litigate the issue.

    The Undue Hardship Standard

    To seek a bankruptcy discharge of a student loan, the borrower must file a lawsuit in bankruptcy court against the lender. The borrower must prove in trial that repayment will impose an undue hardship on the debtor or any dependent of the debtor. These can be hard cases for a borrower to win.

    In California, bankruptcy courts require a finding that the debtor has proven each of the following three elements of undue hardship:

    Most borrowers who succeed in discharging student loans are able to do so because they have a severe total permanent disability, either physical or mental. Most of the cases I have handled involved a mental disability, such as permanent disabling depression and anxiety disorders.

    Getting Help From an Attorney

    Reopening Your Bankruptcy Case

    -Leon

    Reopen A Bankruptcy Case How Do I Do This And Is A Fee Required

    A) Filing a Motion to Reopen – Even though a bankruptcy case is closed, a debtor, trustee, or creditor may want the court to hear motions and enter orders in that bankruptcy case. If so, it is necessary to file TWO MOTIONS. The First Motion is a Motion to Reopen Bankruptcy Case, which may or may not be set for hearing depending upon the particular judge. In most situations a filing fee will be required, and the fee will differ in a Chapter 7, 11, or 13 case. The judge will generally rule on whether to grant the Motion to Reopen before the judge will consider any motion you wish to file once the case is reopened.

    B) Filing the Underlying Motion or Certificate re Personal Financial Management – If the judge grants the Motion to Reopen the case, it is time to file the Second Motion. The Second Motion is often a motion to avoid a judgment lien or a motion to extend the time to file Form 23, Debtor’s Certification of Completion of Course Concerning Personal Financial Management.

    If the purpose of reopening the bankruptcy case is to allow filing of the Certification of Completion of Instructional Course Concerning Personal Financial Management, attach Form 23 to the FIRST MOTION, as the judge may allow Form 23 to be filed without the debtor having to file a second motion and without conducting a second hearing.

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    How Does The Debtor Get A Discharge

    Unless there is litigation involving objections to the discharge, the debtor will usually automatically receive a discharge. The Federal Rules of Bankruptcy Procedure provide for the clerk of the bankruptcy court to mail a copy of the order of discharge to all creditors, the U.S. trustee, the trustee in the case, and the trustee’s attorney, if any. The debtor and the debtor’s attorney also receive copies of the discharge order. The notice, which is simply a copy of the final order of discharge, is not specific as to those debts determined by the court to be non-dischargeable, i.e., not covered by the discharge. The notice informs creditors generally that the debts owed to them have been discharged and that they should not attempt any further collection. They are cautioned in the notice that continuing collection efforts could subject them to punishment for contempt. Any inadvertent failure on the part of the clerk to send the debtor or any creditor a copy of the discharge order promptly within the time required by the rules does not affect the validity of the order granting the discharge.

    When Does The Discharge Occur

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    The timing of the discharge varies, depending on the chapter under which the case is filed. In a chapter 7 case, for example, the court usually grants the discharge promptly on expiration of the time fixed for filing a complaint objecting to discharge and the time fixed for filing a motion to dismiss the case for substantial abuse . Typically, this occurs about four months after the date the debtor files the petition with the clerk of the bankruptcy court. In individual chapter 11 cases, and in cases under chapter 12 and 13 , the court generally grants the discharge as soon as practicable after the debtor completes all payments under the plan. Since a chapter 12 or chapter 13 plan may provide for payments to be made over three to five years, the discharge typically occurs about four years after the date of filing. The court may deny an individual debtor’s discharge in a chapter 7 or 13 case if the debtor fails to complete “an instructional course concerning financial management.” The Bankruptcy Code provides limited exceptions to the “financial management” requirement if the U.S. trustee or bankruptcy administrator determines there are inadequate educational programs available, or if the debtor is disabled or incapacitated or on active military duty in a combat zone.

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    How Long Is Too Long To Reopen A Bankruptcy Case

    ArticlesNovember 4, 2015

    In a per curiam opinion that is not precedential but of interest to lenders who take mortgages as security, the Court of Appeals for the Third Circuit decided that the Debtors effort to reopen her bankruptcy case was too late.

    The basic facts were stated by the court as follows:

    In 1997, Scheib filed a Chapter 13 bankruptcy petition in the United States Bankruptcy Court for the Western District of Pennsylvania. The petition was converted to Chapter 7 and in 1998, the Bankruptcy Court granted a motion by Mellon Bank, N.A. for relief from the automatic stay to pursue foreclosure of Scheibs property in state court. Scheib received a discharge releasing her from her dischargeable debts and her bankruptcy case was closed on October 14, 1998. Scheib was evicted from the property that was the subject of the state foreclosure action in 1999. Scheib has since filed, without success, numerous actions in state and federal court seeking to challenge the foreclosure.

    In 2013, Scheib filed a motion in Bankruptcy Court to reopen her case. Although the motion is far from clear, Scheib appears to allege that she paid her mortgage in full and that Mellon Bank committed fraud in the foreclosure action and the bankruptcy proceeding. . . .

    In re Scheib, 2015 WL 6685714, at *1 .

    The Bankruptcy Court denied the motion, inter alia, as untimely. The District Court affirmed, as did the Court of Appeals, stating:

    Scheib, 2015 WL 6685714, at *1.

    Reopening A Chapter 7 Case To File An Educational Course Certificate

    Some mistakes occur more frequently than othersand forgetting to file a required course certificate is at the top of the list. Heres what happens .

    When you file for bankruptcy, youre required to take two educational courses. The first is a commonly referred to as the first course or pre-bankruptcy filing coursethat youll complete before filing for bankruptcy. The second is a financial management course taken after filing. Its often called the debtor education class, the second course, or the post-bankruptcy filing course.

    Most people file the first certificate along with the other official forms needed to start a case . Although its possible to forget to file the first certificate, the problem usually doesn’t start there. Its the second coursethe debtor education requirement taken after filing for bankruptcythat tends to be at the root of most closure problems.

    The issue arises because, after filing, its easy to focus on other things and forget about the requirement. Exacerbating the problem is the fact that the time to file the certificate of completion is limited. Its due no later than 60 days after the date first set for the 341 meeting of creditors . If you dont file it on time, the court will dismiss the case without issuing a discharge .

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    When Can Your Bankruptcy Be Reopened

    If someone requests that your bankruptcy case be reopened, the court will do so if there is a good reason. But whether or not your bankruptcy will be reopened is at the court’s discretion. In most cases, the court will reopen a closed bankruptcy if:

    • the debtor has additional property or assets that the court must administer
    • the court must give some type of relief to the debtor, or
    • there is another valid reason or cause.

    Who can request that your bankruptcy be reopened? In general, you, the bankruptcy trustee, or any other party in interest may ask the court to reopen your bankruptcy case. The basis for reopening a bankruptcy will typically depend on which party is making the request .

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