How to Amend Chapter 7 After It Has Been Filed
Bankruptcy is understandably often a confusing and stressful time for many people. Assets, income or other creditors are sometimes overlooked. Amending a Chapter 7 (liquidation) bankruptcy petition is not overly difficult but must be done with care and thought. Even if an attorney is managing your petition, you can minimize stress and future problems by understanding how the process works.
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Instructions
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Determine the reason for the needed amendment. Is some income or are some assets not disclosed on the original petition? Are some unsecured debts not listed on the Chapter 7 bankruptcy filing? These are the most common reasons for needing an amendment.
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Notify the bankruptcy attorney, who will advise the court of a pending amendment. If filing for yourself, locate the proper form to present a prospective amendment to the court. This action is called a "Motion to Amend" petition.
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Determine whether any state statutes contradict and override federal regulations. Bankruptcy is an unusual federal law. States can make some regulations that supersede the federal bankruptcy regulations. This ability often presents challenges to a simple understanding of the correct procedures to file a valid petition.
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Request a court date to present the motion to amend the petition. The bankruptcy court and the trustee must hear and approve the amendment request. This is not an automatic privilege awarded to the petitioner. Valid reasons for omitting income, assets or additional creditors must be evaluated. For example, if the court believes the petitioner knowingly left some assets off the original filing, the case may be dismissed.
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Await the bankruptcy court's decision to accept the motion to amend the original petition. If the motion is approved and contains additional creditors, be sure they are notified in a timely fashion. You don't want to face creditors' challenges of a lack of timely notification.
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Tips & Warnings
Unless the bankruptcy is extremely simple, with few assets and predominantly unsecured debt, consider using an experienced attorney to manage the case.
Be very clear with language in the "Motion to Amend," as confusing statements or data can bring negative results from the court and/or trustee.
Don't worry if an old unsecured creditor, no longer appearing on a credit report, is forgotten. Most Chapter 7 discharges cover smaller, unsecured creditors since they would have been included if known. The statute of limitations (SOL) has often expired, prohibiting them from collecting the outstanding debt. Even if it hasn't, an honest oversight of an unsecured creditor typically is also assumed to be part of the petition.
Don't try to add new debt, created after the bankruptcy filing, to your original petition. The court will seldom allow new debts (not old debt just discovered) to be added to a previously filed bankruptcy petition.
