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A Debtor Must List All Debts in Bankruptcy

By Nicholas Ortiz, Boston Bankruptcy Attorney on Apr 17, 2008 in General Bankruptcy Information

Sometimes people contemplating bankruptcy do not want to list all of their debts. This can be the case for a variety of reasons. Often it is because a person owes money to a family member or friend.

However, all debts must be listed in a bankruptcy, whether or not they are dischargeable. A debtor in bankruptcy takes an oath to this effect.

In the recent case of In re Harris, 2008 WL 1732924 (1st Cir.BAP 2008) a debtor failed to list five small credit card debts on her schedules with disastrous consequences. She had listed her larger debts but did not list the smaller ones because, in her words, she did not want to completely destroy her credit. The Bankruptcy Court denied the debtor a discharge under § 727(a)(4)(A), which allows for denial of discharge discharge when a debtor (i) knowingly and fraudulently makes a false oath, (ii) relating to a material fact in her bankruptcy case. The Bankruptcy Appellate Panel affirmed.

Denial of discharge is the most severe penalty in a Chapter 7 bankruptcy case. The irony is that listing the small debts would have had no effect on the debtor’s credit score.

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