Wait…My Bankruptcy Can Be Revoked?
You went through the entire bankruptcy process. You’re on the road to fixing your financial situation and you are informed that your bankruptcy filing has been revoked and the resulting terms nullified. This can happen. The debt that is discharged (unsecured debt) can be reinstated and you can be back at “square one”. This is one of the major reasons you should use a lawyer and make sure all of the information used in the case is accurate. How can this happen?
You committed fraud
If you knowingly or unknowingly gave information regarding unsecured debt which was discharged during bankruptcy, the court can revoke your bankruptcy protection. If you misrepresented unsecured debt in any way to get it discharged, that is fraud. This type of revocation happens when the court discovers the fraud after the resolution of the bankruptcy filing.
You hid assets
Hiding assets in an attempt to hang onto them during and after the bankruptcy case is against the law. If this happens and the court discovers it after the resolution of your bankruptcy case, your protection can be revoked, and you will be responsible for paying your unsecured debt.
You ignored a court order
If the court orders you to complete an action as a result of your bankruptcy filing and you do not complete that action, your bankruptcy protection can be revoked. Your protection is contingent on your fulfilling your obligation to the court.
If any of these actions are discovered within one year of the resolution of your case, you could face revocation. The above list is not all-encompassing.
Who can file a motion to revoke your bankruptcy protection?
Well, if you misled the court and it is discovered after the resolution of your case, the following parties can file to revoke your bankruptcy protection:
The bankruptcy trustee – this is the person that is charged with the task of cataloguing your assets, debts, and any other relevant information to your case. Additionally, they are responsible for liquidating certain assets and allocating the resulting money to your creditors.
The United States Trustee – you may not know this, but there is a federal trustee that is employed by the U.S. Department of Justice that is responsible for “overseeing” all bankruptcy cases and inform relevant policy. They can definitely revoke your protection.
Creditors – if three of your creditors file a motion to revoke your bankruptcy protection, there is a chance it will happen. They have the power to review the case even after it is completed.
What happens if your bankruptcy protection is revoked?
If your bankruptcy protection is revoked, you have a tough time ahead. The court can decide to liquidate some or all of your remaining assets to offset existing debt. If the court finds that you perjured yourself or purposefully hid assets, you could face fines and even criminal prosecution.
Bankruptcy can be a scary idea. However, it is designed to help people that are in dire financial circumstances. If you or a loved one are facing financial ruin, you need help. The attorneys at Dsouza and Strachan are specially trained to help people in this exact situation. Contact Dsouza and Strachan today for a free consultation.