California Court Discusses Statutory Deadlines in Bankruptcy Actions

Disputes over the scope and finality of a bankruptcy discharge strike at the core of the relief the Bankruptcy Code is designed to provide, particularly when creditors attempt to reopen long-closed cases on the basis of alleged misconduct. A recent decision from a California court addresses whether a creditor may revive a Chapter 13 case to seek revocation of a discharge after the statutory deadline has expired, even when fraud is alleged. If you are facing a dispute involving a bankruptcy discharge or creditor enforcement actions, it is in your best interest to speak with a California bankruptcy attorney who can evaluate your options and protect your rights under the law.

Facts and Procedural History

Allegedly, the debtor filed a Chapter 13 bankruptcy petition in 2011 and obtained confirmation of a third amended repayment plan in late 2012. The plan required the debtor to complete all payments and satisfy additional administrative obligations before receiving a discharge. Several years later, the trustee reported that plan payments were complete, but the case was closed without a discharge because the debtor had not filed proof of completion of a financial management course and had not submitted a required declaration concerning a loan modification.

It is alleged that more than seven years later, the debtor successfully moved to reopen the case to cure those deficiencies. After submitting the missing certificate and declaration, the debtor filed a certification in support of discharge that initially omitted a required selection regarding domestic support obligations. The debtor later filed an amended certification affirmatively stating that no domestic support obligation applied. Based on the trustee’s amended final report, the court entered a discharge order in April 2024 and closed the case again.

Reportedly, nearly a year after discharge, the debtor returned to court to seek to reopen the case and pursue claims against a homeowners association for alleged violations of the discharge injunction. The association opposed reopening but was unsuccessful; the debtor then filed an adversary proceeding. Shortly thereafter, the association moved to extend the time to seek revocation of the discharge, asserting that the debtor had committed fraud by falsely certifying that there was no domestic support obligation.

It is reported that the court initially granted the extension request, after which the association filed a complaint to revoke the discharge. The debtor responded by filing motions to strike both the extension request and the adversary complaint, arguing that the statutory deadline to revoke a Chapter 13 discharge had already expired. Following further briefing, the court revisited its prior extension order.

Statutory Deadlines in Bankruptcy Actions

The bankruptcy court analyzed whether it had authority to extend the statutory deadline for revoking a Chapter 13 discharge and whether its earlier order granting an extension should be vacated. The court explained that the relevant order was interlocutory and allowed reconsideration to prevent manifest injustice. It determined that vacating the extension order was warranted because the applicable deadline was imposed by statute rather than by procedural rule.

Turning to the merits, the court applied a plain language reading of the Bankruptcy Code, emphasizing that Section 1328(e) permits revocation of a Chapter 13 discharge only if a request is made within one year after the discharge is granted. Although the Bankruptcy Rules allow extensions of certain deadlines for excusable neglect, the court concluded that those rules cannot override or enlarge substantive rights created by statute. The court rejected the creditor’s reliance on prior Ninth Circuit authority, finding that those cases involved materially different circumstances and did not authorize courts to bypass an explicit statutory limitation period.

The court further reasoned that equitable considerations could not justify extending the deadline, particularly where the debtor had completed all plan payments and earned the protections of a discharge. Because the debtor timely raised the statute of limitations as an affirmative defense, the court ruled that the complaint to revoke the discharge was untimely. As a result, the court vacated its prior extension order, granted the debtor’s motions to strike, and dismissed the adversary proceeding in its entirety.

Consult an Experienced California Bankruptcy Attorney

If you are dealing with creditor challenges to a bankruptcy discharge or questions about post-discharge rights and obligations, obtaining informed legal guidance can make a meaningful difference. The trusted California bankruptcy attorneys of the Law Office of Matthew Roy represent clients throughout California in complex bankruptcy matters, and we can guide you through the bankruptcy process. You can contact the firm at (916) 361-6028 or submit an inquiry through the online contact form to schedule a confidential consultation.