What If All My Debt Isn’t Listed in My Bankruptcy?

I Forgot to Add a Creditor on my BK, Now What??

Declaring bankruptcy requires you to submit a lengthy petition outlining your financial situation and the debts you are seeking to discharge. Forgetting to add a creditor on your bankruptcy petition can have different effects depending on which chapter you filed. Most personal bankruptcies are filed under either Chapter 7 or Chapter 13. Both chapters require the petitioner to attend a hearing known as 341 Meeting of Creditors. If they haven’t already, errors in the petition often come to light at this hearing. Sometimes, however, mistakes slip through the cracks and it may be months or even years until you realize a creditor has been omitted from your bankruptcy petition. 

Do I Have to List ALL Creditors if I am Filing Chapter 7 Bankruptcy?

You need to list ALL of your creditors on your Chapter 7 bankruptcy petition, including money you owe your friends and family. This may mean informing people about your bankruptcy that you wouldn’t have otherwise. Any co-signers on your loans will also be notified of your bankruptcy. All parties to your executory contracts and unexpired leases will be notified as well. However, you can choose to exclude your residential landlord from your mailing matrix. 

What is a Creditor Mailing Matrix and What Does It Do?

You will need to attach a creditor mailing matrix to your bankruptcy petition. The creditor mailing matrix is a list of all of your creditors with their mailing address so that all of your creditors can be notified of your bankruptcy filing. Forgetting to include all of your creditors on your mailing matrix can result in less protections provided by the bankruptcy, and potential hassle dealing with the debt later down the line. 

Forgetting to List Creditors on Your Bankruptcy

When you file either chapter of bankruptcy, you are protected by something known as the Automatic Stay once your petition is filed. When the Automatic Stay is active, your creditors can’t garnish your wages, foreclose your home, or repossess your vehicle. Your creditors will need to file a Motion for Relief from the Automatic Stay and succeed at the accompanying hearing to proceed with collection until your bankruptcy is discharged or dismissed. A Chapter 7 bankruptcy typically takes 4-6 months from filing date to discharge, and a Chapter 13 bankruptcy lasts 3-5 years. However, your creditor may accidentally proceed with collection if they weren’t notified of the bankruptcy. 

After your bankruptcy is discharged, you may still receive negative marks on your credit from debts that you forgot to include in your bankruptcy. Bankruptcy usually has a negative effect on your credit score, so you should be monitoring your credit after a bankruptcy anyway. Catching the mistake as soon as possible after the bankruptcy will help you avoid further negative marks on your credit, and in turn helping you rebuild your credit faster post-bankruptcy. 

What Happens to Debt Not Listed on the Bankruptcy.

If you forget to list a debt in a Chapter 7 bankruptcy, your creditor won’t be notified of the bankruptcy filing, and therefore not be aware of the active automatic stay of protection. Your creditors won’t face sanctions for proceeding with collection in spite of the automatic stay if they were never notified of the stay in the first place. 

You may receive a call from omitted creditors months or even years after your case is discharged. Some companies are used to dealing with bankruptcy filings and know there isn’t much they can do after a Chapter 7- therefore, simply providing them with your bankruptcy case number will be sufficient for the creditor to leave you alone if the debt was incurred before your bankruptcy was filed. Others may not make it so easy for you.  

Can I Add Creditors after my Bankruptcy is Discharged?

If no assets were surrendered to pay your bankruptcy estate, you can add creditors to your Chapter 7 Bankruptcy after your petition is filed by amending your petition. If you filed with an attorney, that attorney can handle the amendment for you, potentially for an extra charge. You will only need to provide your attorney with the creditor information. The court filing fee for a bankruptcy petition amendment is $30. You will need to file the amendment yourself if you filed your case pro se, or without an attorney. 

Filing the amendment will typically actually require four things. You will need to submit the updated petition, or bankruptcy “schedules.” Most jurisdictions require you to submit a cover page which describes the changes to the schedules. You will need to sign a declaration that the changes to your petition are true and accurate to the best of your knowledge. You will also need to file a proof of service that shows you have sent copies to the trustee, the creditor, and any other involved parties. 

What to do After Forgetting a Creditor in a Chapter 13?

Chapter 13 is a reorganization bankruptcy, with debts being repaid in a priority order in monthly payments over 3-5 years. This means if you forget to include a creditor, that creditor won’t be paid in the payment plan. The debt may still be discharged after an amendment if it was an unsecured, nonpriority debt that wouldn’t have received payment in the plan anyway. Otherwise, that debt will remain until you either pay it or file bankruptcy again. 

While adding forgotten creditors to a Chapter 7 usually isn’t a big deal, this is just one of the many pitfalls you can face while filing bankruptcy. The best way to address the problem of forgotten creditors is to file your bankruptcy right the first time. That’s why you need an experienced attorney to draft your petition, review your creditor matrix, attend your 341 Meeting of Creditors with you, and guide you through whatever else the bankruptcy process throws at you. We offer competitive rates and Zero Down Payment Plan options for qualified filers, and the initial consultation is always free. Take the first step towards financial freedom and schedule your free consultation today. 

Our Las Vegas Bankruptcy Attorneys offer free consultations. We have filed thousands of successful Chapter 7 and Chapter 13 bankruptcies in Las Vegas, Clark County, Nevada. We look forward to assisting you with your Las Vegas Debt Relief needs.