Chapter 7 bankruptcy can be a godsend for Louisiana debtors who need a fresh start. In an overwhelming majority of cases, these debtors can rest easy knowing that the debt discharge they receive from the bankruptcy process is permanent for all of their past debts. However, there are some limited circumstances in which the court could revoke the discharge.
Debtors must disclose all assets
The Chapter 7 bankruptcy process contains a number of requirements that must be followed. One requires the debtor to accurately and completely describe their own financial situation. This includes a statement of their assets and debts. Intentional misstatements can be harshly punished. A bankruptcy judge may react viscerally if they find that a debtor committed fraud since it takes advantage of a process designed to help consumers at the expense of their creditors.
Fraud could lead to revocation
One area that could cause debt protection to be revoked is when the court finds that the debtor hid assets. Since Chapter 7 is a liquidation proceeding, creditors are entitled to some of the debtor’s assets. Shielding them from the process is a fraud, and the court could revoke the protection. The same goes for when the debtor gains control of the property during the bankruptcy process and did not disclose it to the court. The bankruptcy laws lay out a number of other types of misconduct that could put bankruptcy protection at risk.
You do not want to get in trouble with the court because a judge could keep you from getting relief and even take back the help that you already got. This is why it is critical to have legal help in a Chapter 7 bankruptcy proceeding. An attorney may help ensure that your filing follows all rules.