DEBTS NOT LISTED MAY STILL BE DISCHARGED IN A CHAPTER 7 BANKRUPTCY
When a person files bankruptcy it is very important that they list all of their debts. It is not only a good idea to gather all of your bills, but also to supplement those bills with a credit report. You can get a free credit report through www.annualcreditreport.com. In fact, this link can be found on my website. Oftentimes after a case has been filed, but before it is finished, a debtor may decide that they have a debt that they failed to list on their Bankruptcy Petition. As long as the debt was one that was owed at the time of the filing of the Bankruptcy Petition, it can be added to the list of creditors. An amendment of schedules should be filed adding this additional creditor to the Petition. This will provide that particular creditor with notice of the bankruptcy filing and avoid any claims by the creditor alleging failure of service. This creditor has been added to the Petition and the bankruptcy has proceeded forward and is now closed. Occasionally, a debtor will find another creditor that was inadvertently omitted from the Bankruptcy Petition or even one that they were completely unaware of. The Bankruptcy Code addresses two categories of unscheduled debts. The first type of debts are those that arise from intentional torts, such as debts incurred by false pretenses, fraud or willful and malicious injury. These type of debts clearly are not dischargeable. The other type of unlisted debt that is not dischargeable is where the particular creditor by not being listed was not provided with a sufficient amount of time to file a proof of claim. This is what a creditor would file in an asset case itemizing the amount owed on its' claim. Most Chapter 7 Bankruptcies are considered no-asset cases. That means that all of the assets that have been listed on the petition have been fully exempted, so the trustee will not be able to take any of the property and sale it in order to distribute the proceeds to creditors. These unlisted or unscheduled debts are considered to be discharged just the same as if they had been originally listed on your Petition. The reason is that these creditors are not being prejudiced because they would not have received anything even had they been listed. This goes in keeping with the notion of allowing the debtor to have a fresh start on the road to financial recovery.
DEBTS NOT LISTED DO NOT GET DISCHARGED IN A CHAPTER 13 BANKRUPTCY
A Chapter 13 Bankruptcy is somewhat different as it is considered an asset case. Each creditor listed on the Bankruptcy Petition is provided with a notice of the bankruptcy filing and a bar date in which to file a proof of claim. A creditor can be added during the bankruptcy and is provided with the opportunity to file a proof of claim. Once the case is closed, the debtor's bankruptcy is not considered effective against any unlisted or unscheduled debt. That particular creditor is considered to have been denied the right to participate in any assets of that particular bankruptcy estate. As you can see, it is very important to make sure that you file a complete list of your creditors at the time of the bankruptcy filing.
If you find yourself overwhelmed with debt, then give Pittsburgh Bankruptcy Attorney Rodney Shepherd a call at 412 471-9670 to schedule an appointment. Attorney Shepherd will help you obtain that fresh start in life, so that you will no longer be a slave to your creditors.