Official Procedure Last Change September 9, 2013

Tips on Denial, Revocation and "Restoration" of Discharge

Steps for Obtaining Denial or Revocation of Discharge

1. File an adversary proceeding.

2. If plaintiff elects to dismiss the adversary proceeding before an answer or response has been filed, file a Notice of Dismissal and serve that notice on the case trustee, the United States Trustee, any counsel that have appeared in either the adversary proceeding or the bankruptcy case, and any party that has intervened in the adversary proceeding pursuant to Fed.R.Bankr.P. 7024.

3. If a settlement is reached that does not include denial or revocation of discharge, file either a stipulation of dismissal or an agreed consent to judgment in the adversary proceeding.

• Use Stipulation of Dismissal if the dismissal is effective without further action by the debtor.
• Use Agreed Consent to Judgment if the debtor is required to take further actions to keep or receive the discharge.  In that agreement spell out the procedure that will be followed for denying/revoking discharge if the debtor fails to comply.

4. If filing a Stipulation of Dismissal, serve a copy on any case trustee, the United States Trustee, any counsel that have appeared in either the adversary proceeding or the bankruptcy case, and any party that has intervened in the adversary proceeding pursuant to Fed.R.Bankr.P. 7024.

5. If filing an Agreed Consent to Judgment, besides serving a copy on the parties listed in paragraph 4, also file a Motion to Compromise and Settle in the bankruptcy case, so that other parties receive notice of the terms of the settlement and have the opportunity to object.

Steps for Enforcing Terms of Settlement

If the debtor’s discharge was not denied or revoked but the debtor agreed to comply with certain terms or be subjected to denial/revocation of discharge, and the court entered an order approving that settlement after notice, then the settlement can be enforced in the case without reopening the adversary proceeding.

Example: Debtor agrees to remit funds due the estate, and agrees that if debtor fails to do so by date certain trustee can file notice of failure in the legal case, with service on debtor and debtor’s counsel, and if no response by debtor Court can enter order revoking discharge without further notice and hearing. Proposed settlement is filed in the legal case, and after notice the Court enters an order accepting the terms.  If debtor later defaults, trustee can proceed as agreed in the legal case - and discharge can be revoked without reopening the adversary proceeding or commencing a new one.

Steps for “Restoration” of Discharge

The proper procedure for giving back the debtors their discharge depends upon how denial or revocation occurred in the first place.

A. If denial or revocation of discharge occurred through an adversary proceeding:

1. File a Motion to Reopen the legal case if the case is closed. A reopening fee applies.

2. File a Motion to Reopen the adversary proceeding, if it has been closed. No reopening fee applies.

3. File a Motion for Relief from Judgment/Order in the Adversary case and upload a proposed order granting. It is not necessary to file the Motion in the legal case as well.

4. If the Motion for Relief from Judgment/Order is granted, then after entry of the order, the Court will issue a notice to all creditors advising that the discharge has been reinstated. Once that notice has been issued, file a Motion to Dismiss or a Notice of Dismissal of the adversary proceeding, as appropriate. Serve that motion or notice on any case trustee, the United States Trustee, any counsel that have appeared in the adversary proceeding, any counsel that have appeared in the bankruptcy case, and any party that has intervened in the adversary proceeding pursuant to Fed.R.Bankr.P. 7024.

B. If denial or revocation of discharge was as a result of the debtors’ default on an agreed entry, and that agreed entry was properly noticed and approved in the legal case:

1. File a Motion to Reopen the legal case if the case is closed. A reopening fee applies.

2. File a Motion for Relief from Judgment/Order as to the order that revoked the discharge and upload a proposed order granting.

3. If the Motion for Relief from Judgment/Order is granted, then after entry of the order, the Court will issue a notice to all creditors advising that the discharge has been reinstated.