It is not uncommon for a client to realize that they forgot to list one of their creditors after filing for bankruptcy. You may have forgotten to list one of your creditors for a number of reasons including: a large amount of time has elapsed since you incurred the debt, you were unaware that you owed that creditor money, or it was a debt right before filing bankruptcy for which you had not received a bill.
Section 11 U.S.C. 523(a)(3) of the bankruptcy code states that a debt that is not listed is not subject to discharge if it fails to allow the creditor sufficient time to file a proof of claim or to file an objection to discharge of the debt.
Does this means that your forgotten debt was not discharged ? Not necessarily.
Chapter 7 "No Asset" Bankruptcy Case
In the 9th circuit, which includes California, Washington, Arizona, Oregon, Nevada, Idaho, Alaska, Hawaii and Guam, if you forgot to list a debt in your bankruptcy case and your bankruptcy was a "no asset" Chapter 7 bankruptcy, then the debt will be treated as discharged. The debt has to be a dischargeable debt for it to treated as discharged in your bankruptcy case. A "no asset" bankruptcy case is a case in which your creditors are not entitled to receive any money or property from your bankruptcy case. If you are in a Chapter 7 asset bankruptcy case it is important that all creditors are listed to avoid non-dischargeability issues.
Other circuits may hold a different position on this issue and may require that the debt be listed in order for it to be discharged. It is important that you check with a local bankruptcy attorney to determine whether the debt that was not listed was discharged.
Chapter 13 Bankruptcy Case
If you have failed to provide notice of the bankruptcy case to a creditor in a Chapter 13 bankruptcy where the creditor was entitled to distribution of income then the debt will not be discharged. The creditor in this situation never had the opportunity to file a claim to collect on the distribution of money in the bankruptcy case.
What If My Case Is Still Open and I Forgot to List a Creditor?
If you have forgotten to list a creditor in your bankruptcy and your bankruptcy case is still open then you need to amend your schedules to list the creditor and give them notice of the bankruptcy. If you fail to amend your schedules and give the creditor notice of your bankruptcy, then the debt may not be discharged. It is always good practice to try to list any forgotten creditor, even if your case is a "no asset" Chapter 7 bankruptcy case.
It is always important to try to provide notice to all of your creditors for the following reasons:
- In a Chapter 7 bankruptcy case you need to provide notice to the creditor to provide them with the opportunity to object to the discharge of the debt. A creditor that was not provided proper notice in your bankruptcy case may seek to reopen your case to determine the dischargeability of their debt.
- In a Chapter 13 bankruptcy you need to provide proper notice to the creditor so that they have an opportunity to file a proof of claim to collect from the proposed payment plan. They also need to have proper notice to have the opportunity to object to the dischargeability of your debt in the bankruptcy.
It is always good practice to amend your schedules and list a creditor that was omitted to avoid any future issue with a debt not being discharged.