Facts:
- Debtor filed for Chapter 7 and received a Discharge
- Shortly after, Trustee filed motion seeking turnover of income tax refund.
- Court Ordered the non-exempt portion of the refunds be paid in lump sum to Trustee
- Debtor made partial payments but did not make all the payments
- Trustee filed Order to Revoke Debtor’s Chapter 7 Discharge since the debtor did not abide by Court Ordered Turnover Order.
- Debtor then paid the remainder of payments to the Trustee
Court Findings:
- In order to revoke a debtor’s discharge, the failure to surrender property must be knowing and fraudulent.
- Trustee must present evidence that the Debtor knowingly intended to defraud the Trustee or engaged in such reckless behavior as to justify the finding.
- Court ruled that the Trustee accepted payments rather than lump sum amount and failed to amend the Order requiring a lump sum payment.
- Debtor’s Discharge was not revoked – Debtor prevailed. No evidence of fraudulent activity.
Court Orders must be following strictly by Trustees and Debtor alike.
