Court Revokes Seattle Man's $3.9M Bankruptcy Discharge
A federal bankruptcy court found Nevin Middleton obtained his chapter 7 discharge by fraud after failing to report about $39,600 in probate funds.
Updated on Nov. 5, 2026 in Debt Relief
The Bankruptcy Court for the Western District of Washington entered a judgment on October 20 revoking the chapter 7 discharge of Seattle resident Nevin Middleton, which had covered $3,967,997 in unsecured debt. The court concluded he obtained the discharge by fraud and knowingly failed to report funds to the chapter 7 trustee.
Why it matters
Revocation means Middleton remains liable for the debts that were discharged, and creditors may pursue payment after the case closes. The ruling shows that undisclosed assets can unwind a bankruptcy discharge years after it is granted.
The court entered a judgment on October 20 revoking the discharge after finding fraud, with the revocation leaving Middleton liable for the full discharged amount. Recovery efforts by creditors and any further legal action have not been detailed in the source.
The players
U.S. Trustee Program
The U.S. Trustee Program is the component of the Department of Justice that oversees the administration of bankruptcy cases and investigates suspected bankruptcy fraud and abuse nationwide.
Bankruptcy Court for the Western District of Washington
The federal bankruptcy court with jurisdiction over cases in the Western District of Washington, which includes Seattle, issued the judgment revoking the discharge.
The details
Middleton originally filed an individual chapter 11 reorganization to resolve debts from a failed custom home construction business, which was later converted to a chapter 7 liquidation and discharged in April 2024. An investigation by the U.S. Trustee Program's Seattle office found he directed funds from his late father's probate estate, through his sister as executor, into a business account the private trustee did not know about; at trial he testified the money was loans from his sister.
Timeline
April 2024: Middleton received his chapter 7 discharge of $3,967,997 in unsecured debt.
October 20, 2025: The Bankruptcy Court entered judgment revoking the discharge.
Legal Context
The U.S. Trustee Program oversees bankruptcy administration through 21 regions and 82 field offices nationwide, and this case shows those regional investigators pursuing undisclosed assets even after a discharge has been granted. A revoked discharge of this size is an uncommon outcome, and it illustrates how discovery of concealed funds can reverse years of finality for a debtor.
Anyone who has received a bankruptcy discharge can face revocation if undisclosed assets such as inheritance funds are later found, which leaves the debtor liable for the original debt. Creditors in similar cases may be able to pursue collection once a discharge is revoked.
The takeaway
Bankruptcy relief depends on full disclosure of assets, including inheritances and business interests, because undisclosed funds can undo a discharge long after it is granted. Anyone filing for bankruptcy should list every expected distribution and interest in their schedules.
Further reading
For more on how bankruptcy discharges work and when they can be challenged, see Debt Relief coverage on Wisevoter.
More information
To report suspected bankruptcy fraud or abuse, visit the U.S. Trustee Program's fraud reporting page.
Source note: This article includes information reported by The United States Department of Justice.
