Weil v. Elliott (In re Elliott)

11 USC 727(e) sets a one-year-from-discharge time limit on a bankruptcy trustee’s request to revoke the discharge based on debtor’s fraud,  but since it is a statute of limitations, the debtor waives its protection if he fails to plead that defense in his answer.  Under 11 USC 727(d), a bankruptcy court must revoke the debtor’s discharge on the trustee’s request if the discharge was obtained by the debtor’s fraud which the trustee did not discover until after the discharge was granted.  11 USC 727(e) provides that the trustee may request a revocation of the discharge within one year after the discharge is granted.  This decision holds that subsection (e)’s time limit is a statute of limitations, not a statute of repose, and so its protections are waived by the debtor if, as here, the debtor fails to plead the statute of limitations as a defense to the trustee’s action to vacate the discharge.  The BAP erred in raising the timeliness issue sua sponte and denying the trustee relief when the debtor had waived the issue by failing to plead the defense.

Ninth Circuit Court of Appeals (Watford, J.; Christen, J., concurring); June 14, 2017; 2017 WL 2562051

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