This is surprisingly not that uncommon. It’s easy for bad debt to get out of hand, and sometimes when your bills aren’t getting paid your debts can be sold, and re-sold to companies you may have never heard of.
Fortunately however, when you decide you are ready for a fresh financial start and are in need of bankruptcy protection your qualified bankruptcy attorney will run a comprehensive, 3 bureau credit report to check and double check for any creditors making claims against you.
This will usually uncover any missing, forgotten or hidden creditors and is another reason you should work with a qualified bankruptcy attorney that is using a 3 bureau, not 2 bureau credit reporting system. But even with the best technological capabilities out there, it could still be possible that the system misses one. Then what? What happens if I missed one?
At this point it will depend on what type of bankruptcy is being filed, but the good news is that the laws in New York are designed to protect you. The vast majority of the Chapter 7 cases we file in our office are “non-asset” Chapter 7 cases. In this type of case unless something was done to intentionally cheat or harm the creditor the debt will almost always be discharged in the bankruptcy even if it wasn’t included in the original bankruptcy petition. 11 USC Section 523(a) (3)
If the bankruptcy trustee did not give a deadline for creditors to make claims then the debt is automatically discharged without the case being re-opened. Since in a no asset case you have nothing the trustee can take to sell and re-pay your creditors there is no need to set a deadline, and the trustee is very unlikely to do so. In this case you would simply inform these creditors that you have filed for bankruptcy, share a copy of your discharge with them, and inform them that the debt you had with them was from before your bankruptcy.
Now Chapter 7 Bankruptcy cases with assets or Chapter 13 Bankruptcies are more complicated than a “non-asset” Chapter 7 and will require the assistance of a qualified bankruptcy attorney to best understand the specifics of your case. In these cases you will have to work with the bankruptcy court and explain why the creditors were not listed originally. Then the court may or may not let you re-open your case to make the correction, and if you are denied then you will owe the creditor.
When you file for bankruptcy it is very important to list all of your creditors on the initial petition. We use the best credit reporting software available today in our office so we ensure this rarely if ever happens. When it does occur, usually if it was an honest mistake and not an attempt to trick the court the bankruptcy court will allow you to re-open the case and amend the petition, thereby protecting you from having to repay the debt in full.
If you are concerned that you may have forgotten who you owe money to, don’t let it prevent you from seeking bankruptcy protection. You will achieve a fresh start regardless of whether you may have missed one of your creditors on your original petition. Your bankruptcy attorney will know how to uncover any hidden creditors, and will also know how to fix the problem if a creditor were to somehow be missed.
If you live in New York and are considering bankruptcy relief please give the offices of William Waldner at 212-244-2882 to arrange a free bankruptcy consultation today. We want to help you eliminate your debt and give you a fresh start without having to worry about sorting out all the details of who you owe. We are here to help with that. We offer free consultations, only practice bankruptcy law, and have a 100% discharge (for all chapter 7 cases as of 8/9/13) record in New York City.
This article is intended for educational purposes only. By reading this article no attorney-client relationship has been created.