How to Amend a Discharged Chapter 7 Bankruptcy
You've been through a Chapter 7 bankruptcy and gotten your discharge. Your "fresh start" is underway. A few days later, the phone rings; it's a bill collector. Or the mail comes; it's a collection letter. You were sure you were through with the phone calls and the letters, and that your discharge prevented them from hounding you. Then you realize the call or the letter is for a debt you forgot to include in your bankruptcy. After you get past the "What was I thinking?" stage, amending your bankruptcy is the solution.
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Instructions
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Amending the Petition
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Reopen your closed bankruptcy case by filing a motion for leave to amend your bankruptcy petition. This is done by leave of court, and the way to obtain leave of court is by a "motion." Find the website of the bankruptcy court for the district in which your discharge was issued. Most court websites have a form bank where you can download forms, including a motion to reopen the case to amend the petition (see Reference #2). If it is unavailable online, the clerk's office may have a form you can copy, or they might allow you access to the court's law library. While you are researching, locate a form "order" the judge can sign, granting the motion.
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Prepare an amended schedule on which the new information will appear. If your amendment is to add a creditor, the amendment will be to Schedules D, E or F, depending on whether the creditor is secured (a mortgage or car loan), priority (taxes, student loans, child support) or non-priority (credit cards, personal loans). If you are amending to add omitted property, the amendment will be to Schedule A (real property) or B (personal property). If the property you are adding is covered by an exemption, make sure to amend Schedule C (the exemption schedule) to assert the exemption.
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Assemble the motion package, pay the fee and file it with the clerk's office. Motion practice requires that a motion be filed, usually 30 days prior to the "return" date, so check with the clerk or the judge's chambers about available motion days and set the return date accordingly. In some districts, the motion may be done on "presentment," meaning that if there is no opposition, the motion will be granted, and the order signed, on the return date. Most bankruptcy filings are done electronically, by practitioners having a password issued by the court. Check with the clerk to be certain how paper filings are handled. You will need several additional copies of the motion papers to be served, by mail, upon the omitted creditor, the trustee and upon any party that appeared in your earlier bankruptcy proceeding. This can be determined by reviewing the PACER information of your case from the court's computer. Once you know whom to serve, mail copies to all of the necessary parties and certify to the court that this was done.
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Appear in court on the return date of the motion, if local practice requires. If you fail to appear on the return date, and an appearance was required, the motion will be denied, and you will have to start over, and maybe have to pay another filing fee. Once the Order is signed, mail a copy to the newly included creditor and certify that you did so to the court.
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Tips & Warnings
Before you do anything else, determine if it is necessary to actually amend your petition in the first place. If the issue is a forgotten creditor and your Chapter 7 was a "no asset" case, it might not be necessary to amend at all. A case is considered a "no asset" Chapter 7 case if all of the property in your schedules was exempt, nothing was surrendered to the trustee and sold, and there was no distribution of funds to creditors. While some courts disagree, in most circuits, it is not necessary to reopen and amend a petition to add a creditor in a no-asset Chapter 7 case. The majority of courts take the position that, unless creditors were required to file a proof of claim (as in an "asset" case), an unlisted creditor has not been prejudiced by not receiving a notice, or not receiving it in time to file a proof of claim. In these situations, the courts believe it to be futile to require debtors to amend, and the debt is to be considered discharged (see Reference 1). However, if your proposed amendment is to add a creditor in an asset case or to add an asset that was inadvertently omitted from the petition, amendment will be necessary.
If your motion is to reopen the case to add omitted property, and you fail to also amend the exemption schedule (if applicable), the amended property will have to be surrendered, a Trustee re-appointed and notices of possible distributions will have to be sent to all parties. If you are not certain whether the property you will be adding to the petition is exempt, speak to an attorney. Bankruptcy court clerks are very helpful, but they are not attorneys and they cannot give you legal advice. The clerks will help you understand the procedures involved in making your motion, but they will not fill out forms for you, nor tell you what to say. If, after you have done your research, you still require further assistance, speak to an attorney. Do your research in advance to be certain that the procedure is really necessary. You may be able to persuade the omitted creditor that the debt was discharged by providing it with your bankruptcy information. If a creditor persists after being advised of the bankruptcy discharge, consider combining your motion to reopen with a sanctions motion. A sanctions motion seeks to penalize the creditor for continuing to attempt to collect a debt that has been discharged.
