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.
In general, only an interested party can ask the bankruptcy court to revoke your discharge. In most cases, the revocation request will come from:
The reasons a bankruptcy court might revoke your discharge depend on whether you filed for Chapter 7 or Chapter 13 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:
In Chapter 13 bankruptcy, an interested party can request the court to revoke your discharge if you:
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.
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.
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.
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.