Many American consumers have previously filed for bankruptcy. For most, the most stress-relieving part of the process is when they receive their discharge of debt. The discharge order relieves the debtor of all liability to repay the debts included in the bankruptcy, offering them a fresh start financially. However, some have heard “horror” stories about the bankruptcy court revoking a discharge of debt.
Can the Bankruptcy Court Revoke a Chapter 7 Discharge?
The court may indeed revoke a Chapter 7 discharge (11 U.S.C. § 727(d)). The trustee, a creditor, or the U.S. trustee may request that the discharge be revoked if:
•the petitioner engaged in fraudulent behavior to obtain the discharge,
•the petitioner knowingly (and fraudulently) failed to report the acquisition of property or surrender estate property to the trustee,
•or the petitioner makes a material misstatement or fails to provide documentation or info in connection to an audit of the case.
What Happens If the Chapter 7 Bankruptcy Discharge is Revoked?
If the court revokes your bankruptcy discharge, you are no longer released from the responsibility to pay debts listed in your bankruptcy. Instead, you remain liable for your previously discharged debts. Your creditors are then able to resume collection efforts. They may garnish your wages, levy on your car or house, and record liens. Additionally, if you committed bankruptcy fraud or abused the bankruptcy system somehow, you could be assessed fines, be required to forfeit assets, or even face federal criminal charges.
What Happens If I Lose My Discharge Order?
While having your discharge revoked comes with potentially severe consequences, losing your discharge order does not have to cause much trouble at all. If you lose your discharge order, your discharge is not affected. You can simply obtain another copy of the order by contacting the clerk at the bankruptcy court where you received the original order. The court will charge a fee for searching the records to find the information, and there is also a fee for making additional copies. If the case is officially closed, there could also be an additional “retrieval” fee to obtain the record from archived files. In some cases, you may be able to use self-service access to public records to obtain a new copy of your order.
We understand that financial struggle is complex, and we want to help. If you have questions about bankruptcy and how to obtain a Chapter 7 discharge, please don’t hesitate to contact Ken Rannick. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Ken Rannick is recognized as a Board Certified (Senior Specialist) in Consumer Bankruptcy Law by the American Board of Certification. In addition, he is recognized and inducted as a “Superlawyer” by his fellow lawyers, which is awarded to less than 2% of all lawyers in his field. You are in good hands with Kenneth C. Rannick P.C.