Complaint to Revoke Chapter 13 Discharge

Summary

This template motion is for use by an attorney representing a party seeking to revoke the discharge of a Chapter 13 debtor under Section 1328(e) of the Bankruptcy Code. This template includes practical guidance, drafting notes, and alternate and optional clauses. Section 1328 of the Bankruptcy Code provides that once a Chapter 13 debtor has completed payments per the Chapter 13 plan, they are entitled to a discharge of all debts provided for by the plan, unless any such debt was excepted from discharge under the Bankruptcy Code. 11 U.S.C. § 1328. If a bankruptcy court has already granted the debtor a discharge, a party in interest may seek to revoke the discharge, within one year of its granting, if: ● The discharge was obtained by fraud ● The requesting party did not know of such fraud until after the discharge was granted 11 U.S.C. § 1328(e). Since the statute uses the term "may", courts have found that they have the discretion to not revoke the discharge even if the discharge was obtained by fraud. Collier on Bankruptcy P 1328.04. Note that Section 1328(e) is different than Section 1330 of the Bankruptcy Code. Section 1330 provides that, upon request of a party in interest at any time within 180 days after the entry of the confirmation order, the court may revoke confirmation of the Chapter 13 plan (as opposed to the discharge) if, after notice and a hearing, the court finds that confirmation was obtained by fraud. 11 U.S.C. § 1330(a). The only ground for revocation of a discharge under Section 1328(e) is fraud and the same is true for revocation of an order of confirmation under Section 1330(a). However, Section 1330 does not include the requirement that the moving party did not know of the fraud. Kupersmith v. McCutcheon (In re McCutcheon), 598 B.R. 339, 346 (Bankr. M.D. Ga. 2019). There is an open question as to whether Federal Rules 59 (incorporated by Bankruptcy Rule 9023) and 60(b) (incorporated by Bankruptcy Rule 9024) can be used to vacate discharge orders outside of the deadline and other requirements set forth in the statute. See Midkiff v. Stewart (In re Midkiff), 342 F.3d 1194, 1203 (10th Cir. 2003) ("Bankruptcy Rule 9024 allows the Bankruptcy Court to provide relief from a final judgment or order . . . [w]e hold that 11 U.S.C. § 1328(e) does not prevent the Bankruptcy Court from providing relief under Rule 9024"); see also In re Tereick, 2023 Bankr. LEXIS 1986, at *9 (Bankr. E.D. Va. Aug. 9, 2023) ("A number of courts have held that, in addition to fraud, Bankruptcy Rule 9024 (incorporating Federal Rule of Civil Procedure 60(b)) may be operative in a revocation of discharge case . . . The Rules Enabling Act provides that the Bankruptcy Rules 'shall not abridge, enlarge, or modify any substantive right . . . Rule 9024, therefore, cannot be construed to expand the one ground for revocation of a discharge under Section 1328(e)"); In re Kirk, 2014 Bankr. LEXIS 1169, at *15 (Bankr. D. N.M. March 25, 2014) ("the Court holds that Rule 60(b) could be used, in the appropriate case, to set aside a discharge order without running afoul of §§ 727(b), 1328(e), or other provisions of the Bankruptcy Code"); In re Keener, 2020 Bankr. LEXIS 2827, at *5 (Bankr. N.D. Ohio Oct. 9, 2020) ("many courts have held that Rule 60(b) can only be used to correct a court's own error in entering the discharge order"). This template only relies on Section 1328(e) as the basis for the revocation. For additional resources for attorneys representing a party in a Chapter 13 case, see Individual Chapter 13 Bankruptcy Resource Kit. For general information on Chapter 13 bankruptcy cases, see Chapter 13 Bankruptcy. For information about the discharge for individual debtors, see Discharge and Exceptions to Discharge in Individual Cases. For other discharge resources, see Bankruptcy Discharge Resource Kit. For your planning purposes, note that the defendant in a bankruptcy adversary proceeding must in general file an answer or other responsive papers within 30 days after issuance of the summons. Fed. R. Bankr. P. 7012(a)(1).