6 Reasons a Discharge Order Can Be Revoked
Discharging debts is almost always the primary objective of people who file Las Vegas bankruptcy, even those who file in Chapter 13 rather than Chapter 7. Although some debtors use other mechanisms the Bankruptcy Code provides, such as the automatic stay or lien-stripping in Chapter 13, they are much rarer than those who seek a fresh start from their debts. However, once the discharge order is issued, it is not irrevocable. The Bankruptcy Code lists several reasons why the bankruptcy court can revoke the discharge order, leaving the debtor in the cold. The trustee, a creditor, or the U.S. trustee may request the bankruptcy court to revoke the discharge for the following reasons after the debtor has received notice and if there has been a hearing if:
- The debtor obtained the discharge through fraud, and the party requesting revocation did not know about the fraud until after the discharge was entered.
- The debtor acquired property of the bankruptcy estate and knowingly or fraudulently didn’t report it to the trustee or failed to deliver it to the trustee.
- The debtor refused to obey a lawful order of the court, other than to respond to a material question or to testify. If the debtor gives a reason other than self-incrimination for refusing to respond to a question or testify, the discharge can be revoked.
- The debtor was given immunity and still refused to respond to a material question or to testify.
- The debtor fails to explain a material misstatement in an audit of the bankruptcy case.
- The debtor fails to make the documents related to the bankruptcy case available to the auditor.
In most circumstances, any party that wishes to challenge the discharge has one year after the discharge or a year after the case is closed to file its motion with the bankruptcy court. After that, the discharge is permanent.
The likelihood of facing a party that challenges your discharge is remote, so most debtors do not need to worry about it.
For more questions about bankruptcy in Las Vegas, please feel free to contact an experienced Freedom Law Firm Las Vegas bankruptcy attorney for a free initial consultation. Call us at 1-702-803-9251 to set up your free consultation.