- Can a Debt Discharge Be Revoked? Probably Not, if You Acted in Good Faith.
- If the creditor can prove that the petitioner fraudulently withheld financial information, or provided false information. If the deliberate act of fraud can be shown to have affected the decision to discharge the debt, the creditor may legitimately seek a revocation of the debt.
- If the debtor, through an act of deliberate fraud, acquires property or assets that are the property of the estate and does not report or surrender the asset to the bankruptcy trustee.
- When the petitioner refused to obey an order of the court, relative to the decision to discharge a particular debt.
Can a debt, once discharged by the Bankruptcy Court, be revoked and the petitioner be compelled to repay all or a portion of the debt? It is a common concern among people who have had their debts discharged under Chapter 7 or Chapter 13 bankruptcy. After all, after so many years buried in deep debt, it may be difficult to believe that you are finally clear of creditors’ collections actions.
The U.S. Bankruptcy Code provides for a discharge revocation only under three specific circumstances:
Fraud or deliberate contempt of Bankruptcy Code laws is the common factor in all three instances of a possible revocation of a discharge. In most cases, creditors will not have sufficient grounds to pursue a revocation if fraud cannot be proven, or if the amount of discharge is not sufficient to pursue a complaint.
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