It’s no secret that filing for bankruptcy is a complicated process. Filing alone can have you up to your ears in paperwork, and when combined with the stress you may feel from the debt you are in, mistakes can happen. As such, if you forget to list a creditor when filing, you may assume this is no big deal. However, this can have serious consequences for the outcome of your case. If this reflects your circumstances, you’ll want to keep reading to learn more about this complicated process and how a Montgomery County bankruptcy lawyer can help you during these difficult times.
Why Must I List All Debts During Bankruptcy?
If you wish to file for bankruptcy, one of the most important things you must understand is why you are required to list all creditors as part of your filing. When you owe a debt, whether to your credit card company, mortgage lender, or even a family member, you can’t pick and choose who gets paid, as they are all vulnerable to financial loss. As such, to ensure fairness, all liabilities must be listed when filing.
If you do not list a creditor, you can face serious consequences. However, this will depend on the chapter you file and the type of case your filing is classified as. During Chapter 7, if your case is considered an asset case, it means that you have money available to disperse to creditors. As such, a creditor not included can lose the share of funds they are entitled to. As such, unlisted debt will not be discharged. However, if you have a no-asset case, meaning there are no funds available to distribute, you may not be held responsible. This is because some courts believe that the creditor would not have gotten paid anyway. However, some courts could rule that an unlisted debt is still non-dischargeable, meaning you are still liable.
If you file for Chapter 13 and forget to list a creditor, you will still be responsible for the debt, as it will not be discharged at the conclusion of your case.
What Should I Do if I Forget to List a Creditor During Bankruptcy?
In the event you forget to include a creditor or liability when filing for bankruptcy, it’s imperative to understand what you can expect. In the event that your case is still pending, you’ll find that this is a relatively simple fix. You simply have to file a motion to make an amendment to your case to include the forgotten creditor. This requires a small fee. However, you’ll also have to submit a new Form 106E/F and an affidavit of service for all relevant parties.
However, if your case is closed and you learn that you forgot to include a creditor in your filing, it’s imperative to connect with an experienced attorney as soon as possible. They can examine your circumstances and determine the best course of action.
Whether you forgot to list a debt or have not yet filed, it’s imperative to connect with an experienced bankruptcy attorney as soon as possible. At Mudrick & Zucker, P.C., we understand how complicated this process can be to navigate. That is why we are committed to making your bankruptcy filing as smooth as possible. When you need help, do not hesitate to contact our team today to discuss your circumstances.
