To be successful in bankruptcy, full and complete disclosure of your debts is required. This isn’t always possible. But there is good news. You can amend your bankruptcy to include a forgotten creditor.
Try to Disclose All Debts at Time of Filing
To the maximum extent possible, list all of your debts on your bankruptcy petition the first time. The court will send notifications to each of these creditors. The initial notification is very important. It tells creditors about your bankruptcy case. The initial notice also contains important deadlines.
If a creditor is not listed at the time of filing, they will not receive the initial notice of your bankruptcy. If the unlisted creditor takes action against you, it wont necessarily be their fault.
Consequences of Not Listing a Creditor
As discussed above, not listing a creditor can create some problems. The first one is obvious. The creditor might not ever find out about your bankruptcy. This means that the creditor might not take appropriate steps to prevent further collection activity against you.
In some cases, an unlisted debt may not be excused by the bankruptcy court. This means that you could emerge from bankruptcy still owing one or more creditors money. This would be a very unwelcome surprise at the end of a bankruptcy proceeding.
What to do Next
If you discover that you forgot to list a creditor on your initial bankruptcy paperwork, contact your attorney. You should do this as soon as possible. There are steps that can be taken, including amending your bankruptcy paperwork, to fix this problem.
If the unlisted creditor is not discovered until after your bankruptcy case is over, again I would advise you to contact your bankruptcy attorney as soon as you can. In certain circumstances, you may need to take additional action. In other cases, nothing else is required because of a unique feature of bankruptcy law in the Ninth Circuit.
I am a bankruptcy attorney in Sacramento, California. Please call my office at (916) 333-2222 if you have questions about bankruptcy proceedings in Northern California.