What is a closed bankruptcy? Under which circumstances would a bankruptcy case be reopened?

Question

What will be an ideal response?

Answer 1

A closed bankruptcy indicates that there is no longer any activity in the debtor's case. Under 11 U.S.C. § 350(a), the court shall close the case after the estate is fully administered and the court has discharged the trustee. It is when the bankruptcy court has officially determined that the case is over and no longer requires the court's involvement. The bankruptcy case is closed when the trustee has completed administration and there is no longer any activity in the case. The closing of a bankruptcy case also does not necessarily mean that the debtor's case was discharged.

A closed bankruptcy case may be reopened, with the court's discretion, by debtors, the trustee, or any party in interest. A reopened bankruptcy is a case that was closed but now reactivated and opened for further proceedings. Under 11 U.S.C. §350(b), a bankruptcy case may be reopened to administer assets, accord relief to the debtor, or for other cause. The last prong of this Bankruptcy Code section allows the court some flexibility to define what cause would justify reopening a case. A debtor may want to reopen a case if it is alleged that one of the creditors engaged in some form of misconduct.