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“ Craig D. Robins, Esq., has been a practicing Long Island bankruptcy attorney for over twenty-four years ”
Can a Chapter 7 Discharge Be Revoked?
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Written by Craig D. Robins, Esq.In a typical Chapter 7 bankruptcy case, the debtor is able to discharge most debts. Dischargeable debts include credit card debts, personal loans and medical bills. Some debts are non-dischargeable such as most taxes and student loans.
In most Chapter 7 cases, the court grants the debtor a discharge about four months after the case is filed.
However, if a debtor engages in certain improper conduct, the bankruptcy court can revoke the debtor’s discharge.
For example, if the Chapter 7 trustee leans that the debtor obtained the discharge fraudulently by lying about material facts in the petition or by failing to disclose assets, then the trustee can bring this to the attention of the court and ask that the debtor’s discharge be revoked.
Other grounds for revoking the debtor’s discharge include failing to cooperate with the trustee.
Generally, an application to revoke the debtor’s discharge must be brought within one year of the date of discharge.
Debtors should be aware that receiving a discharge is not an excuse for refusing to cooperate with a trustee
I currently have a recalcitrant client who was directed by the trustee to turn over the tax refund which was not exempt.
Before the debtor received his tax refund, the court granted him the discharge. The debtor then contacted me saying that since he received his discharge, he was not going to cooperate with the trustee.
This debtor is sadly mistaken. If he does not turn over the tax refund to the trustee, it is just a question of time before the trustee brings a motion to revoke the debtor’s discharge. — and the trustee will prevail since the debtor is demonstrating bad faith.
If the debtor fails to cooperate with the trustee by refusing to turn over assets of the estate, then the trustee will often bring a motion against the debtor seeking to vacate the debtor’s discharge.
