Will My Debt Get Discharged If I Forget To List it in My Chapter 7 Bankruptcy?

Question

I forgot to list a debt on my Chapter 7 bankruptcy petition and schedules. Now what happens? Will it be wiped out or will I still owe it?

Answer

That depends on where you live and whether you had assets in your bankruptcy case.

The Rule in Most Circuits: Debt Discharged in No Asset Cases

Bankruptcy rules require you to list all of your creditors in your schedules. If you do not, then the omitted debt might not be discharged. However, in most bankruptcy districts, the omitted debt is discharged if yours is a “no asset” bankruptcy case. A no asset case means that you do not have property that the trustee could take and sell off to pay your creditors. The majority of Chapter 7 bankruptcies are no-asset cases.

The Rule in Some Jurisdictions: Not Discharged Even in No Asset Cases

However, in some jurisdictions such as the First Circuit Court of Appeals (Maine, Massachusetts, New Hampshire, Puerto Rico, and Rhode Island) if you omit a debt from your bankruptcy papers, it will not be discharged, even if yours is a no asset case.

Exception: When the Omitted Debt Is Discharged

In both the First Circuit and in asset bankruptcy cases filed elsewhere in the country, the omitted debt is discharged if:

• the unlisted creditor had notice of or knew about your bankruptcy case, and
• the creditor had time to file a proof of claim while your bankruptcy was still active.

What Should You Do If You Forget to List a Debt?

If you are faced with the possibility that a forgotten debt might not be discharged, you may still have some options.

Amend your case. If your bankruptcy case is still open and you haven't received a discharge yet, you should amend your bankruptcy schedules to add the unlisted creditor. (To learn how, see How to Amend Your Bankruptcy Forms.)

File a motion to reopen your case. If your case is already closed, then you may have to file a Motion to Reopen your bankruptcy case to add the unlisted creditor. You must have a good reason for failing to include the omitted creditor. If the court agrees with you and reopens your case, then you can add that creditor for the purpose of discharging the debt.