What Happens If My Bankruptcy Discharge Is Revoked?
If you commit fraud or don't follow bankruptcy rules, the court can revoke your bankruptcy discharge and your debts won't be wiped out.
Most debtors file for bankruptcy to eliminate their debts and obtain a fresh financial start. Your bankruptcy discharge wipes out your personal liability for most types of debt. But if you are not completely honest in your bankruptcy papers or fail to follow all the rules, the court can revoke your discharge even after your case is closed. Read on to learn more about what happens if the court revokes your bankruptcy discharge.
For more information on how a bankruptcy discharge affects particular types of debt, see our topic area on The Bankruptcy Discharge.
Who Can Ask the Bankruptcy Court to Revoke Your Discharge?
In general, only an interested party can ask the bankruptcy court to revoke your discharge. In most cases, the revocation request will come from:
Reasons a Bankruptcy Discharge Might Be Revoked
The reasons a bankruptcy court might revoke your discharge depend on whether you filed for Chapter 7 or Chapter 13 bankruptcy.
Chapter 7 Bankruptcy
If you filed for Chapter 7 bankruptcy, the bankruptcy trustee, United States trustee, or your creditors can ask the court to revoke your discharge if you:
- committed fraud when obtaining your discharge and the fraudulent act was not discovered until after your discharge was granted
- didn’t disclose or surrender to the trustee assets that were property of the bankruptcy estate
- refused to follow court orders, or
- made a material misstatement (which you couldn’t explain to the satisfaction of the court) or failed to turn over all necessary documents in a bankruptcy audit.
Chapter 13 Bankruptcy
In Chapter 13 bankruptcy, an interested party can request the court to revoke your discharge if you:
- used fraud to obtain your discharge, and
- the party requesting revocation didn’t know about the fraud until after the discharge was already granted.
Time Limits for Revoking a Bankruptcy Discharge
In Chapter 7 bankruptcy, if the revocation is based on fraud, it must be requested within one year after the discharge is granted. If the debtor failed to report assets that were property of the estate or disobeyed court orders, the requesting party can ask the court to revoke the discharge within one year of the discharge or the closing of the case, whichever is later.
In Chapter 13 bankruptcy, a request to revoke a debtor’s discharge must be made within one year after the discharge is granted.
Consequences When a Discharge Is Revoked
If the court revokes your bankruptcy discharge, you remain liable for the debts that were included in your discharge. In addition, if you committed fraud or otherwise abused the bankruptcy system, you may also have to pay fines, forfeit assets, or face criminal prosecution.
You Remain Liable for Your Debts
When you receive a bankruptcy discharge, it wipes out your personal liability for and obligation to pay back many types of debt. But if the court revokes your discharge, you remain on the hook for the debts included in your discharge. This means that you are essentially back to where you started before you filed your case.
You May Be Fined or Criminally Prosecuted
Depending on the reasons the court revoked your discharge, you may also have to pay fines and penalties. If you hide assets or commit bankruptcy fraud, you may be required to forfeit some of your assets or be criminally prosecuted for your actions.