Despite your best efforts, it is possible that you will forget to list a creditor in your Chapter 7 case. Avoiding this problem, by the way, is why we always encourage our clients to request and bring us copies of credit reports obtained from all 3 credit bureaus – Equifax, Experian and Trans Union.
Here’s what you can do if you forgot a creditor…
If your case was a “no asset” case – in other words, if your case lasted only about 5 months and your trustee did not identify any property to seize and sell – you are most likely protected from claims of unsecured creditors. Judges in the Northern District of Georgia generally take the position that if an unsecured creditor would not have participated in any distribution by the trustee anyway, that creditor was not harmed by being left off your Chapter 7 case.
If you left off a secured creditor, that creditor’s security interest in collateral will not be affected by your bankruptcy discharge, although your personal liability on the debt is most likely extinguished.
If you left off a creditor intentionally, or if the creditor would have had a viable argument that its debt was non-dischargeable or that you have engaged in some activity that would make your entire case not worthy of a discharge, then you could have problems to address.
An omitted creditor can file a motion in Bankruptcy Court to reopen your case so that the creditor can pursue any remedy that would have been available to that creditor if it was listed and did receive notice. Further, if the creditor can prove that you intentionally left the creditor off your petition, your Chapter 7 discharge could be at risk.
Best Strategy for Chapter 7
It is always in your best interest to list every possible creditor. At a minimum you should obtain copies of your credit reports. Further, if there is any party that could conceivably pursue a claim against you, you should discuss with your lawyer and include on your petition.