What Happens If I Forget to List a Creditor on My Bankruptcy Application?

Filing for bankruptcy is a big step and one of the reasons people postpone the process is because they are scared to make a mistake.

For good reason, too.

Submitting incomplete or misleading information when you file for bankruptcy can result in rejection of your bankruptcy request. This is true even if your mistake was truly unintentional.

One of the most important reasons to work with an experienced bankruptcy attorney when filing is because he or she will help you with your application and ensure it is complete. When you’re overwhelmed by debt and collection calls, it can be tough to remember the ones that aren’t aggressively pursuing you for payment. A bankruptcy attorney will review your complete financial picture and make sure all the “i’s are dotted and t’s are crossed,” as they say.

The Importance of Including Every Creditor When You File for Bankruptcy

Bankruptcy applications are filed under penalty of perjury. This is the same as if you were to step into a courtroom and raise your right hand to swear to tell “the truth, the whole truth, and nothing but the truth,” and then announce your debts to the courtroom. Your application must contain “the whole truth” to be considered valid and for you to be granted bankruptcy.

The last thing you want when you are filing for bankruptcy is to inadvertently leave off a debt and have that honest mistake cost you an opportunity to get your financial life under control.

In many cases, the courts have allowed unlisted debts to be automatically discharged or erased, but only in no-asset bankruptcy cases. However, if the court suspects you fraudulently failed to list the creditor, your case could be re-opened. For a more detailed look into re-opening a bankruptcy case, check out this essay from the Department of Justice.

It’s also possible the debt left off your application will not be dischargeable. This means that creditor can still file a lawsuit against you and that you are still legally obligated to pay that debt as-is. It is in your best interest to include all of your debts when you file because it’s the only way they can be discharged or made part of your payment plan.

Remember, there is no such thing as “partial bankruptcy” where you can deal with a few problems now and postpone others until later. Bankruptcy is an all-inclusive, major opportunity to hit the financial restart button and you should use it as such!

How to Make the Most of Bankruptcy

Even with the best intentions, it’s possible to forget a creditor when filling out your bankruptcy application on your own. There’s a lot on your mind right now and compiling an overview of your financial situation in detail is going to feel overwhelming. This is why it’s important to have someone on your side, guiding you through the complicated bankruptcy process.

If you are ready to file or you want more information on how bankruptcy could help you, contact R. Flay Cabiness, II, P.C. at (912) 554-3774 (Brunswick, GA); (912) 375-5620 (Hazlehurst, GA) or; (912)-554-3756 (Jesup, GA).