QUESTION
To what extent schedules can be amended after closure of Chapter 7 case?
Asked on Aug 28th, 2016 on Bankruptcy - Ohio
More details to this question:
My brother didn't mentioned an inheritance law suit fought overseas in his Chapter 7 case. He got discharged and case was closed. In the meanwhile, he kept contesting his legal case. On bringing the fact to the court of litigation, he reopened his case on motion "he might have got entitled to his share in his father’s inheritance either on date of filing petition or within 180 days". Can a case with omitted asset be opened on this motion? He has not filed amended schedules even after 3 months or reopening of case.
2 ANSWERS
Sure, the bankruptcy court is usually quiet lenient about allowing a debtor to reopen a case to include an asset that was omitted in the initial filing. The case will be held open until it can be established the value of the asset, at which point, it becomes a matter for the trustee to collect the asset and distribute it to creditors.
Answered on Sep 22nd, 2016 at 6:26 PM
Commercial & Bankruptcy Law Attorney serving Powell, OH
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Ronald K. Nims
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In order to amend the schedules in a bankruptcy, the case must be reopened. Whether a case is reopened is decided by the court. It's pretty much automatic for cases to be reopened for omitted assets unless the value of the assets is minimal or the person moving to reopen the case wasn't diligent in pursuing the assets (say, the trustee moves to reopen a case where the trustee was aware of the assets while the case was still open and simply didn't bother to take steps to secure the assets). There is no specific deadline for filing amended schedules upon the court ordering a case to be reopened but if nothing is filed for the court to process, eventually the case will be closed again. Courts don't allow cases with no issues and no assets to remain open indefinitely.
Answered on Sep 22nd, 2016 at 6:25 PM