What To Do When A Creditor Is Left Out Of The Bankruptcy Petition.
It is extremely important to list all of your creditors in bankruptcy. Only the debts listed will be discharged. This is why we run a credit report and ask our clients to give us a list of every creditor. Usually we find all of the creditors this way, but sometimes a forgotten (or unknown) creditor that does not appear on the credit report will be inadvertently left off of the schedules, meaning their debt is not subject to discharge, and the Client can still be held liable for that debt regardless of the bankruptcy UNLESS action is taken.
The most common occurrence of this involves debts associated with hospital visits. When you receive services through a hospital, you will generally receive invoices from not only the hospital, but also the doctor who treated you. So, if you only list the hospital, the debt to the physician who bills you separately from his office is not going to be covered. It is very important to list both. If your trip to the hospital was so close to your filing date that you have not yet received bills, you must make a phone call to the hospital to find out who you should expect to receive bills from.
This also happens when a Debtor has no recollection of a creditor’s details and the debt does not appear on the credit report. In these situations I encourage the Debtor to try their hardest to remember as much as possible. Even if we do not know an account number or the amount owed, as long as we get the creditor’s name and address, we can include it in the bankruptcy.
If a creditor has been left off of the schedules and you realize it while your case is active, we are required to file amended schedules and identify the creditors. There is a small fee to the Court for filing amended schedules, but it is necessary to complete your bankruptcy petition. If you do not realize it until after your case has been closed out, we may have to petition the court to re-open the case in order to amend the schedules and discharge that debt. There is a more substantial fee for that, but again, it is usually necessary.
Obviously, debtors are expected to be open and honest in describing assets and debts, so if a debt was unintentionally left off of the Petition, you must bring that to your attorney’s attention RIGHT AWAY. It can be fixed. An intentional failure to list a creditor, on the other hand, can cause that debt to be declared non-discharged and survive the bankruptcy. In extreme cases courts have denied a bankruptcy discharge because of the debtor’s intentional failure to list all debts.
Uncontested Divorce: Do You Still Need To Disclose All Of Your Assets?
Many couples who have decided to divorce want the marriage to be over as quickly as possible. This is understandable in light of the emotions associated with everything that the couple has had to consider in coming to this difficult decision. While moving on with life is a desired outcome, moving on by leaving the marriage with little or no assets can lead to resentment and more difficulty after divorce.
In dividing assets, it is just as important to know what one is giving up as it is to know what one is getting. It is encouraged for a couple to agree to the division of the marital property; however full disclosure of assets and debts is the only way to fully understand the complete financial picture of the marriage.
Many may believe that such disclosure is a waste of time since they have already agreed on who gets what. The importance of disclosure comes down the road when one discovers that the other had been putting a good portion of money into their retirement, or when one discovers that their name is on debt that they didn’t know about. Divorcing couples still want to believe in each other and not assume the worst, but these types of scenarios occur every day.
The bottom line is to be informed; know what you are giving up before signing an agreement. It may avoid pain from the past from coming into your future.