Case Closed: Too Soon

Do I have to wait til the bankruptcy discharge is entered to avoid a lien under §522(f)?

It might be logical but do so at your peril, I replied.  Actually “peril” is an overstatement, but in this date of electronic dockets, most clerk’s offices are closing no asset Chapter 7 cases just as soon as the discharge is entered. I recently  found my judge without jurisdiction to award fees for the frivolous behavior of opposing counsel in a motion for relief from stay when the clerk’s office closed the case despite the pending motion.

If you have motions to file or reaffirmations to be approved, you need an open case in which to do it.  You can reopen a case, of course, but it is a hassle.  It may require a new filing fee,  since that’s the way ECF is set up.  Getting it back almost costs more than it’s worth.

Remember that Rule 404(c)(2) allows the debtor to move to delay entry of the discharge.  If you have pending motions as the discharge approaches, a call to the case administrator may get your case off the conveyor belt to automatic closing.

Also, remember that while you can reopen a case at any time to avoid a lien that impairs an exemption, it usually comes up when your client is just about to close escrow on a sale or refinance.  You will not be a hero if the transaction is delayed or jeopardized while you reopen the bankruptcy and move to avoid the lien, when that could have been done when the bankruptcy was initially filed.

Get it on your calendar and get it done, forthwith!   And consider whether your fee agreement permits you to charge for the effort.

Image courtesy of Wikimedia and Juliane Krug