I Forgot To List A Creditor In My Chapter 7 Bankruptcy: Now What?

by Douglas Jacobs, Esq.

April 16, 2007

It happens all the time. No matter how hard you try, no matter how hard your attorney urges you to be sure to list everybody, somebody inevitably slips through the cracks. Maybe it’s a credit card that you forgot about, or an old loan from the bank, but there it is. What do you do now?

A debt owed to an unlisted creditor isn’t discharged in your bankruptcy according to Section 523(a) (3) of the code. But, some of our courts have found that in certain circumstances even if the creditor was unlisted, the debt will go away.

There are two kinds of Chapter 7 bankruptcies: those with assets, and those without (a “no asset” case). In an asset case, the debtor owns property or something of value which isn’t exempt so the trustee will receive something to pay to the unsecured creditors. In the more common no asset case, there’s nothing for the trustee to get because all of the property is either exempt, or of so little value that it’s not worth pursuing.

In some courts, including the Ninth Circuit, in a no asset case, even an unlisted creditor is discharged since even had they been listed they wouldn’t have gotten anything anyway. So, no harm has been done. In an asset case, you must amend your schedules to include them so they can share in any dividend (payment by the trustee to the creditors).

Even in a no asset case, however, it’s good practice to go back to amend the bankruptcy. Without notice the creditor can continue to harass you to pay the debt until they realize you’ve filed bankruptcy.

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Douglas Jacobs is a California bankruptcy attorney and partner in the Chico law firm of Jacobs, Anderson, Potter & Chaplin. Since 1988, Mr. Jacobs has taught Constitutional law and Debtor-Creditor/Bankruptcy law at the Cal Northern School of Law. He has served as Dean of Students since 1994. He is a frequent lecturer on the subject of consumer bankruptcy law, and has spoken at both state and national levels.

Last modified: May 28, 2013