When a bankruptcy is discharged from the U.S. Bankruptcy Courts, many debtors believe their battle with creditors is over. If a debtor fails to meet the terms of the discharge, or committed fraudulent acts before or after his discharge, his creditors may seek a revocation of the discharge. If a bankruptcy ruling is revoked, the debt is no longer considered resolved.
After Revocation of Bankruptcy
If a bankruptcy is revoked, all the debts listed in the bankruptcy are again exposed to collection attempts. Creditors may request payments for debts, take legal action against the debtor and begin charging interest and fees again. The entire process of the bankruptcy that was revoked is treated as if it never occurred. Creditors may not add back interest and fees for the time the account was in bankruptcy. Debtors will be expected to pay the debts as they were prior to the bankruptcy filing.
Refiling for Bankruptcy
If a bankruptcy has been revoked, the debtor may apply for bankruptcy protection again. The earliest a debtor may refile for bankruptcy is six months after the original revocation. In the event it that the refiling takes place prior to one year from dismissal, the stay protecting assets is reduced to 30 days. After that stay, creditors may contact you to attempt a settlement or debt repayment plan to avoid entering the debt into bankruptcy. Fees, penalties and interest may be charged after the stay until the time of dismissal.
Reasons for Revocation
Federal law regulates reasons for revocation of a bankruptcy discharge. All of the reasons for revocation are the fault of the debtor, not the creditor. A bankruptcy ruling may be revoked for undisclosed estates or property, fraudulent filings and claims, refusing to show all required paperwork within the dictated time frame, or if the debtor disobeys a court order to testify or turn over documents. Once the bankruptcy is revoked for any of these reasons, creditors may resume collection efforts until a new bankruptcy case is filed.
Protecting Bankruptcy Discharges
The easiest way to prevent revocation of a bankruptcy ruling is to be informed. Simple items like listing everything owned, providing copies of all the paperwork during the case, and following court instructions all help ensure a bankruptcy will not be revoked in the next year. Be honest with yourself, with your bankruptcy attorney and with the courts. Creditors will attempt to find any reason to have a bankruptcy revoked, as they can recover more from you outside of bankruptcy.