Many people expressed the notion that a bankruptcy discharge, known also as a section 727 discharge, cannot be reopened by the debtor. It is unclear on what basis they made their statements. The reason is that they are incorrect in their notion. Under bankruptcy law section 350 and rule 4007(b), if a debtor with a discharge has proper reason to re-open the discharge and it is within two years of the discharge date a bankruptcy discharge can be re-opened and not just because of fraud or wrong doing by the debtor or a creditor. The debtor can be the one to petition that the discharge be re-opened. Oftentimes the reason is that a creditor that had been forgotten and left off of the filing has begun some action against the debtor, requesting payment or else. Section 521 of federal bankruptcy law requires the listing of all assets of the debtor. A bankruptcy judge has to determine if this absence was a mistake or deliberate. Another reason can be that a creditor continues to demand payment after that creditor’s debt to the debtor has been discharged. This is in violation of federal bankruptcy law section 524. It prohibits exactly that type of action by a creditor. The debtor must re-involve the bankruptcy lawyer to begin the activities for re-opening.
The debtor must file a motion, either as a letter requesting re-opening or in some states and jurisdictions, as a formal request. In either case the debtor must file amended paperwork and proper schedules to show the difference by the creditor, and pay the filing fee of $250 - $300. The debtor can request or file a motion to waive the filing fees. The court must determine if the merits of the request warrant a re-opening of the bankruptcy. This is an event that courts do not take lightly but the court must still insure that the bankruptcy law is still being used in a proper, non-frivolous manner. If and when the court re-opens the case, the diligence taken in the original proceedings must be retraced. The trustee must redo the 341 hearing and interview the debtor on the new information for the bankruptcy. This includes measuring the new asset or new debt against potential exemptions noted in federal bankruptcy law under section 523. Then, based on this new information, the trustee must amend the discharge paperwork and finalizing papers.
Adjusting the discharge date by a re-opening does cause the date to change on one’s credit report. This is a point to also consider. Many experts stated that the re-opening is worth it in the long run.