Case Summary:
After learning of a previously undisclosed, pre-petition personal injury claim and subsequent settlement award given to Debtor post-discharge, the United States Trustee moved to reopen a Debtor’s Chapter 7 case and appoint a trustee. Five months after the case was reopened, the Debtor amended her Summary of Assets and Liabilities, Schedule A/B, and Schedule C to disclose the lawsuit for the first time and claim an exemption for the personal liability award. The trustee objected to the claim of exemption as untimely, arguing that (1) Debtor should have known about the personal injury lawsuit when she filed for bankruptcy, as she responded to a TV advertisement and filled out a retainer agreement in connection with the lawsuit shortly before she filed for bankruptcy, and (2) there was substantial delay between the reopening of her bankruptcy and the date on which she filed the amendments. In response, Debtor said she was unaware she had a claim and did not intentionally fail to disclose the lawsuit. The Court found that while Federal Rule of Bankruptcy Procedure 1009(a) provides a liberal right to file amended schedules, this right ends once a case is closed. As a result, a debtor seeking to amend schedules in a reopened case must request and establish cause for extending time to do so under Federal Rule of Bankruptcy Procedure 9006(b)(1). The Court found that because Debtor neither asked for an extension of time to file her Amended Schedule C nor attempted to show excusable neglect for failing to disclose the asset or file an Amended Schedule C before her case had closed, the Trustee’s objection must be sustained.

Statute/Rule References:
Fed. R. Bankr. P. 1009(a) -- General Right to Amend
Fed. R. Bankr. P. 9006(b) -- Enlargement

Key Term:
Excusable Neglect