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Can Your Bankruptcy Discharge Be Revoked?

Upon completion of a successful bankruptcy case, you will receive a discharge stating that you are no longer responsible for the debt you owed to your creditors. In most cases, a bankruptcy discharge is permanent, but there are rare instances where the discharge can be revoked – which means that creditors may resume pursuing a debtor for money. Here we’ll review the various reasons why a Chapter 7 or Chapter 13 bankruptcy discharge can be revoked and what happens once the request goes to court.
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Chapter 7 Bankruptcy

In order for a Chapter 7 bankruptcy discharge to be revoked, the trustee, creditors, or the United States trustee must be able to show one of the following:

  • You refused to obey court orders.
  • You failed to produce required documents during your audit or did not explain a material misstatement.
  • You acquired assets that would be considered property of the bankruptcy estate and did not disclose this to the court or trustee.
  • You fraudulently obtained your discharge, and the involved parties did not discover it until after your discharge was issued.

Generally, requests for revocation must be sent to the court within one year of discharge. To avoid discharge revocation, it is critical to be complete and honest on your filing paperwork.

Chapter 13 Bankruptcy

If you received a Chapter 13 discharge, it can only be revoked if a party of interest can show that you filed fraudulently and that this fraud was not discovered until after the discharge was granted. How exactly is bankruptcy fraud defined? For Chapter 13 bankruptcy, fraudulent activity includes lying on your bankruptcy petition, failing to disclose all sources of income, or hiding assets. If any of these acts are uncovered under a revocation request, you could lose more than just your discharge. Bankruptcy courts have to the power to seek criminal prosecution and asset forfeiture. The best way to avoid this is to be completely honest and thorough on all bankruptcy papers–hiring a bankruptcy attorney can ensure that you do not mistakenly omit important information and risk being subjected to fraud charges.

What Happens When Your Discharge is Revoked

It starts when a creditor or trustee uncovering fraud and filing a complaint with the court. In this complaint, cause must be convincingly shown. Following the filing of this complaint, you will receive a notification and be given a chance to oppose it during a court hearing. At this hearing, both you and the complainant party will present evidence and arguments. At the end of the hearing, the court determines whether there is sufficient cause (see above for definitions of fraud and other causes of revocation) to revoke your discharge and whether additional penalties must be levied.
When your discharge is revoked, your debts will be reactivated and creditors (even those not involved in the complaint) will be free again to pursue the money owed to them. Your best bet is to hire an attorney specializing in bankruptcy. Your attorney will be able to guide you through the entire process and verify that you have not missed any assets, made false statements on your filing, or otherwise committed fraud.
If you are filing bankruptcy in Las Vegas, and would like to speak to an experienced attorney, contact DeLuca & Associates at (702) 252-4673 to request a free consultation.

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Bankruptcy Law Firm Serving Nevada

4560 S. Decatur Blvd. Suite 302
Las Vegas, NV 89103

(702) 252-4673
hope@deluca-associates.com

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