What Happens if I Miss a Creditor in My Bankruptcy?

Alongside your initial bankruptcy petition, you must submit schedules that list your outstanding creditors. Namely, Schedule D covers creditors with secured debts, in which property serving as collateral is attached (i.e., mortgages, car loans, etc). Then, Schedule E lists your unsecured creditors with priority debts (i.e., taxes, domestic support, etc.), and Schedule F is for those without priority (i.e., credit card debt, medical bills, etc). The whole point is to let all your creditors have a fair chance of filing a proof of claim or objecting to the bankruptcy discharge if they deem it necessary. That said, please continue reading to learn what happens if you miss listing a creditor on one of your schedules and how an experienced Louisville, Kentucky consumer bankruptcy lawyer at Schwartz Bankruptcy Law Center can help you avoid this complication at all costs.

What happens if I miss a creditor in my Chapter 7 bankruptcy?

The consequence of missing a creditor in your Chapter 7 bankruptcy filing may depend on your case type. That is, in a no-asset case, you may not have any non-exempt assets that your appointed bankruptcy trustee can take, liquidate, and distribute amongst your creditors. And so, your unlisted creditor may not get directly hurt by this, and your unlisted debt may still be discharged as normal.

However, in an asset case, you may have exempt assets that can benefit your creditors. This is to say that your forgotten creditor may be deprived of a payout. At the same time, this debt may not have been discharged at your case’s close. This is to say that your creditor may be legally allowed to take actions to collect this outstanding debt afterward. If you wish to rectify this unintentional error first, though, you may file a motion to reopen your bankruptcy case and amend your schedule(s) to include your missed creditor(s).

What if I leave out a creditor in my Chapter 13 repayment plan?

If you fail to list a creditor in your initial Chapter 13 bankruptcy filing, it may significantly impact your court-approved repayment plan. This is because, with this bankruptcy type, you are supposed to follow a three- to five-year schedule to pay back your outstanding creditors. Obviously, not including a certain creditor in this plan may be deemed unfair and unacceptable. Therefore, you may have to take matters into your own hands by filing a motion to amend your bankruptcy schedules, or even dismissing your case and refiling.

Besides your case type, it may matter whether the Kentucky bankruptcy court believes your action was unintentional or intentional. If they believe a creditor was truly forgotten on your end, they may be more willing to grant your motion to amend your schedule and/or reopen your case. However, if they suspect malicious intent, they may accuse you of perjury, which in and of itself is a crime. Or, they may go as far as deeming you guilty of bankruptcy fraud, which is associated with legal consequences like prison time and hefty fines.

We can sympathize with how daunting this whole legal battle may be for you. Well, lucky for you, the team at Schwartz Bankruptcy Law Center has successfully gone through this countless times before. So please, retain the services of a skilled Louisville, Kentucky consumer bankruptcy lawyer today.