What if I Forget a Creditor in my Bankruptcy in New York City?
When you start the bankruptcy process in New York City you are required to list all of your debts to the best of your ability, and its best if you can remember every creditor you’re in debt with. But in this day and age that may be easier said than done. It can be easy for bad debt to get out of hand, and sometimes when bills aren’t getting paid your debts can be bought and sold a few times and you could end up owing money to a company you have never even heard of. So while you are required to list all your debts on your bankruptcy petition under oath it’s not the end of the world if you forget a creditor in good faith. Your bankruptcy attorney will also pull your credit report to help uncover any missing or forgotten creditors. Our firm actually runs a comprehensive 3-bureau credit report with public records and medical debt search for all of our clients at no additional charge. This is the fullest and deepest search available and usually uncovers everything out there.
It will be your responsibility to carefully review and confirm this list of debts and the associated addresses connected with them for your attorney. It’s possible, that even after a careful search, a debt still occasionally gets missed. Well the good news is that a forgotten debt can always be added to your bankruptcy case after it has been filed- 11 USC Section 523(a) (3). There is no deadline for adding debts to a case, but you may have to pay a fee depending on the jurisdiction in which you file. In a no asset Chapter 7 bankruptcy case missing a creditor may not make a difference to the outcome since the trustee has nothing to distribute to your creditors in repayment anyway. However, it’s still your responsibility to accurately list all your debts even in a non asset case. A non asset Chapter 7 case can become an asset case quickly if the trustee finds something in the estate to distribute to your creditors that maybe you hadn’t thought of.
If you forget a creditor in a Chapter 13 it could become more of a problem. If a creditor is not listed in your Chapter 13 case they can assert they are still owed 100% of the outstanding debt because they were never informed of the bankruptcy filing. They can claim they never had a chance to object to the case and that they lost their rights to challenge your repayment plan. Although this is rare, it’s still best to avoid this situation entirely by accurately listing all of your debts and creditors in the first place. If you are working with a qualified law firm in New York City listing all of your debts on your bankruptcy petition accurately is rarely a problem. If the court sends a notice of your bankruptcy to one of your creditors and it gets returned for having the wrong address, you are required to make at least one more good faith effort to resend the notice to the creditor and provide proof of this to the court. After this you are off the hook. You and your attorney have done your part in notifying your creditors of your bankruptcy. In our offices we actually list every possible address for a creditor so there is no way they can object to being notified of your case. AMEX might receive six good faith notices to six separate addresses about the same debt to ensure we have covered all of your bases.
If you can’t remember who you owe money to, don’t let it prevent you from seeking the bankruptcy protection you need. You will get your fresh start from your debt 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 contact the law offices of William Waldner online or at 212-244-2882 to arrange a free bankruptcy consultation today. We offer free consultations, only practice bankruptcy law, and have a 99% Chapter 7 bankruptcy discharge record as of 9/31/16 in New York City.
This article is intended for educational purposes only. By reading this article no attorney-client relationship has been created.