03
Aug
2022
Debtor Re-Opening Bankruptcy Case to Add Creditor Denied
Debtor’s attempt to re-open his bankruptcy case was denied by the Court when debtor asked to reopen his bankruptcy case fourteen months after the case was closed.
The debtor sought to reopen the case and add an additional creditor which had not been listed in the initial case.
The bankruptcy court applied the “doctrine of laches”, which prohibits an individual from sitting on his/her rights and then attempting to enforce those rights long after they arose.
The court noted that a motion to reopen a case must be brought within a reasonable period of time. The court held that a fourteen month delay, incurred solely by the debtor, was not a reasonable period of time and denied the debtor’s request to reopen the case.
The court reasoned that the strong policy and purpose of the bankruptcy laws is to ensure prompt and efficient administration and settlement of the estate, which requires that an interested person, including the debtor, act promptly to preserve its rights. Debtor’s motion was denied. In re Jackson,142.B.R. 325.
EDITOR’S COMMENT
Some courts have held that a debtor may not reopen a bankruptcy case later than one year after the initial case was closed. Other courts have adopted the position that there is not a one year limitation and the matter should be left to the sound discretion of the court. In the latter situation, the court will weigh the reasons constituting the delay and determine whether the debtor has a legitimate excuse for not having acted sooner.
Article Author: Charles R. Harroun, Attorney at Law
This entry was posted
on Wednesday, August 3rd, 2022 at 9:28 am and is filed under Bankruptcy, National.
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