When you entrust your bankruptcy case to us, you can be sure that we will use our many years of experience in Colorado bankruptcies to get you the best possible outcome. We will take the time to explain each step in the process and its significance. But when you file for bankruptcy protection, you agree to do two fundamental things:
- Cooperate with your lawyers and obey the orders and directions of the court. A debtor can jeopardize his or her case by failing to obey court orders, failing without excuse to produce required records or (subject to the Fifth Amendment privilege against self-incrimination) refusing to answer proper questions under oath.
- Be honest and forthcoming, both with your lawyers and, most especially, with the bankruptcy trustee and the court. As I explain below, like an uncooperative debtor, a dishonest one risks the outcome of his or her case. In addition, however, he or she may also be subjected to serious criminal liability.
For all practical purposes, the end of a Chapter 7 or Chapter 13 bankruptcy case comes when the court issues a “discharge order”. Except in fairly rare cases in which a creditor or the trustee successfully objects on technical grounds, a debtor who has complied with the process can expect to receive a discharge. Once this happens, except for certain debts that can’t be eliminated through bankruptcy, (see “Will Bankruptcy Get Rid of All of My Debts?”) the discharge eliminates forever your obligation to repay.
In the overwhelming majority of cases, a discharge order is permanent and final – no creditor can ever collect on any debt covered by the order.
In some limited instances, however, a creditor or the trustee may ask the court to revoke the discharge. Most often, it’s due to the the debtor’s deliberate dishonest acts or statements in connection with the bankruptcy. This is known as “bankruptcy fraud”. Common examples include intentional concealment, transfer or destruction of the debtor’s personal or real property (whether owned when the debtor filed or acquired afterwards) and falsification, concealment or intentional destruction of financial records.
A creditor or trustee who discovers after the discharge is granted that the debtor has committed bankruptcy fraud has the right to ask the court to revoke that discharge. The debtor is entitled to notice of this request, along with the right to a hearing. If the request succeeds, it’s as though the bankruptcy was never filed, and all debts that would have been eliminated are reinstated. The debtor will never again be able to resort to the bankruptcy court to eliminate those debts.
A dishonest debtor also risks more than the outcome of his or her case. Bankruptcy fraud is also a federal crime, punishable by steep fines and significant prison time. In addition, deliberately false statements may subject the debtor to false swearing or perjury charges.
Now that I have your attention, I do want to stress that we’re talking about deliberate misconduct here. be corrected, provided they’re promptly disclosed. We will do our very best to ensure that we’ve gathered all required information before your petition is prepared, and then carefully review it with you before you sign. But the trustees and the court understand that honest mistakes, such as forgetting to list a particular bank account or other asset, happen. Fortunately, these errors can almost always be corrected, provided they’re promptly disclosed.
If you have any questions about the bankruptcy process or whether bankruptcy might be the right option for you, don’t wait – give Colorado Bankruptcy Law Group a call at 303.331.3403 or click here to schedule a free, no obligation consultation with one of our experienced and knowledgeable bankruptcy attorneys.