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Can a bankruptcy case be reopened after discharge in a Chapter 7 bankruptcy case?

Winchester, CA |

Filed for chapter 7 in 2009, discharged in 2010. Was going thru a personal injury case which was disclosed to the trustee and bankruptcy was discharged. My ex husband, which at the time we were going thru a nasty divorce, filed a complaint with the bankruptcy court claiming I committed bankruptcy fraud. My settlement on my personal injury was settled a year after my bankruptcy and the amount was for pain and suffering. No money was sought for medical bills as these were discharged in my bankruptcy. Now the bankruptcy court has filed a motion to reopen my case. How can that be and what are my chances of it remaining discharged since i disclosed everything to the court and my bankruptcy was still discharged at the time.

Attorney Answers 7

  1. If the PI case was disclosed on Schedule B and abandoned by the Trustee, I don't see why the case would have been reopened. You need to speak with your bankruptcy attorney *immediately* about this.

    The legal analysis of any situation depends on a variety of factors which cannot be properly represented or accounted for in a response to an on-line question. Any answer, discussion or information is intended as general information only, is not intended to serve as legal advice or as a substitute for legal counsel, and should not be relied upon in making any decision. If you have a question about a specific factual situation, you should contact an attorney directly.

  2. for personal injury matters, you are allowed to keep a portion as an exemption. if the award reaches beyond that exemption, the beyond part could go to creditors. it sounds like the trustee didn't bother to monitor the personal injury matter after your discharge either in error or because s/he did not think it would ever amount to much of an award. now that it is reopened, file an amendment for the most personal injury exemption that you are allowed to take. if you don't know how to do this, any competent local bankruptcy lawyer can help you with the paperwork.

  3. I always get to the party too late to be add any value except to echo my colleagues - talk with an attorney ASAP. In most cases, the reopening of a bankruptcy case is bad news.

  4. WHat is not clear is did you list the claim in Schedule B (and C) or not. Telling the trustee does not comply with your duties to list. Any asset not listed is never abandoned either and thus remains the trustee's ability to enforce it . Thus, retain a great bankruptcy lawyers is my advice.and disclose disclose disclose!

  5. My colleagues have given you good advise with which I concur. A personal injury claim existing at the time of your BK is an asset of the BK estate and should have been disclosed as such on Schedule B and exempted on Schedule C. Mere "disclosure" to the trustee may not have been sufficient without having been specifically listed in your Schedules. If it was listed, the trustee may have "abandoned" the claim as not being likely to bring money into the BK estate. If so, the trustee may be limited in his tardy effort to recclaim the asset excess for the estate\. What does your lawyer say about representing you against the claim of the trustee?

    You are not my client and I am not your attorney. This advice is given in the spirit of the AVVO platform and is based on general legal principles. You become a client when you enter into a formal retainer agreement with me.

  6. You need to see a good bankruptcy attorney immediately. Do not try to defend this yourself.

    Yes, any bankruptcy case can be reopened at any time if there is sufficient legal cause. An allegation of failing to disclose an asset on Schedule B is sufficient cause to reopen your case. Check with your attorney to make sure that this was disclosed on Schedule B. If so, there should not be much of a controversy. Settlements for pain and suffering are usually exempt. If it was not disclosed, you could lose all the recovery for failure to disclose.

    This is not legal advice and I am not your attorney until you retain my office. Always consult with an attorney in your area before acting on anything you read on the internet.

  7. If the claim was fully disclosed on the petition and the trustee did not prosecute it in the name of the bankruptcy estate, then he has abandoned the claim and you were free to continue it on your own. If your ex-husband's grounds for reopening the case is that you intentionally undervalued the claim at the time, he would need to show you knew it was worth more than you disclosed. Of course, however, a pain and suffering damages are a question for the jury, so you likely couldn't have known what that would come out to. Did he have any claims against you that were discharged in the bankruptcy? If so, he may be angling to get a piece of that, but it doesn't sound like there are any grounds to revoke a discharge. Maybe just sour grapes?

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