Can a Bankruptcy Discharge Get Revoked?
If you file for consumer bankruptcy or business bankruptcy and seek a discharge of eligible debts, do you ever need to worry about the discharge being revoked? In other words, if you reach the end of your bankruptcy case and you receive a discharge, can the bankruptcy court later come back and revoke the discharge, such that you will once again be liable for your debts that were previously discharged? This is a rare occurrence, but it is possible in certain situations. You should not anticipate that your discharge will be revoked, but our West Palm Beach bankruptcy attorneys can tell you more about the kinds of circumstances under which a revocation might occur. And if you have any concerns at all about the specific details of your bankruptcy, it is important to seek legal advice as soon as you can.
Understand When a Debtor Can Receive a Discharge
In order to understand when the issue of a discharge being revoked might arise, it is important to understand when a debtor can receive a discharge of eligible debts in a bankruptcy case.
An individual debtor can typically be eligible to have debts discharged in a liquidation or a reorganization bankruptcy case (i.e., under Chapter 7, Chapter 13, or Chapter 11 for certain debtors whose debt exceeds the limits for a Chapter 13 filing. Differently, a business debtor should only expect to receive a discharge in a Chapter 11 case or another type of reorganization bankruptcy (such as Chapter 12).
When a Bankruptcy Discharge Can Be Revoked
In a consumer liquidation or reorganization bankruptcy under Chapter 7 or Chapter 13 (or a related filing, or in a business reorganization case under Chapter 11 (or a related filing), a discharge can only be revoked when there are issues of impropriety that arise. Even then, any request to revoke a discharge must usually be filed within one year, and then the bankruptcy court will determine whether or not to revoke the discharge.
More specifically, a bankruptcy discharge may be revoked under the following circumstances:
- Debtor obtained the discharge through fraud;
- Debtor concealed non-exempt assets;
- Debtor provided misinformation in an investigation or audit of the bankruptcy case.
The Bankruptcy Code clarifies the types of improprieties that can result in a bankruptcy court deciding to revoke a discharge.
Contact Our West Palm Beach Bankruptcy Lawyers Today
Generally speaking, you should not go into a bankruptcy case worrying about the possibility of your discharge being revoked at the end, or let this concern take up your mental energy as you are working through the terms of your repayment plan. A discharge will not be revoked when there is no impropriety in the bankruptcy case, and by working with an experienced West Palm Beach bankruptcy lawyer at Kelley, Fulton, Kaplan & Eller from start to finish, you can ensure that all potential concerns are handled properly before they ever become an issue. Contact our firm today to find out more about how we can assist you with your bankruptcy case, including answering any questions about the bankruptcy discharge.
Source:
law.cornell.edu/uscode/text/11/727
