What If You Forget To Include A Creditor On Your Bankruptcy Petition?

by Recovery Law Group Recovery Law Group

Filing for bankruptcy requires you to undergo a lengthy documentation and petition process, fearing what many people step back. However, you don’t have to if you are proceeding under the professional and trusted guidance of an attorney. When you are supposed to file bankruptcy, you need to submit a petition describing your financial situation and the debts you want discharged. Now, if you forget to add one or two creditors in your petition, it might have a different effect on the process based on under which chapter you have filed. Personal bankruptcies are mostly filed under either chapter 7 or Chapter 13 bankruptcy, but both require you to attend the hearing called 341 Meeting of Creditors. The main reason why you must attend this hearing is most errors in the petition come to light at this hearing.

Should I list all my creditors if I am filing under Chapter 7 bankruptcy?

You are required to list all your creditors on your petition, including the money you owe your family and friends. This simply means informing everyone related to you and the debt that you have filed for bankruptcy. If you have a co-signer, he or she will be notified on the same too. Parties involved in your unexpired leases and executor contracts will be notified too. You can, however, choose not to include your landlord from the mailing matrix.

Define creditor mailing matrix and its function

Your bankruptcy petition must come along with a creditor mailing matrix. The creditor mailing matrix contains the names of all your creditors with their mailing addresses, hence they can be notified on your bankruptcy filing. Now, if you have forgotten to add one or two names on the mailing matrix, it might result in less protection to be provided by the bankruptcy and also potential hassles handling the debt later.

Forgot to list creditors on your bankruptcy?

No matter which chapter’s bankruptcy you have filed, you are protected by the Automatic Stay, either way, once your petition is approved. As soon as the Automatic Stay is active, your creditors are stopped by the law from garnishing your wages or other bank accounts, repossessing your vehicle, or even foreclosing your house. Your creditors will have to file a Motion to acquire RELIEF from the Automatic Stay and also thrive at the accompanying hearing in order to ensue with the collection until the point your bankruptcy is dismissed or discharged. Chapter bankruptcy usually takes 4-6 months since the filing date to dismiss, while Chapter 13 bankruptcy is designed to stay around for over 3-5 years. Your creditor, however, might accidentally continue with the collection if they were not notified about the bankruptcy in the first place.

Once the bankruptcy is dismissed, you might still even receive negative remarks on your credit from the debts that you had forgotten to include on your bankruptcy petition before. This is why attending to 341 Meeting of Creditors is important. The sooner you and your attorney are able to catch these mistakes, the better for you because only then you can avoid those negative marks on your credit.

What if I forget to include a debt on the bankruptcy?

When you forget to include a debt on your bankruptcy petition, your creditor will simply not be notified of your bankruptcy declaration, therefore your debt will stay active for you to repay as asked or ordered. Besides, your creditor will not face any sanction if they decide to proceed with collection despite your active Automatic Stay order.

You might receive a call from the forgotten creditors months after your case is dismissed. Some banks or companies go easy with bankruptcy filing if you simply provide them with your bankruptcy filing number. But, some might not. This is why it’s important to include all your creditors in your bankruptcy.

What if I forget to include a creditor in Chapter 13 bankruptcy?

Chapter 13 bankruptcy allows you to repay your debt over the span of 3-5 years through an organized repayment plan. This means if you have forgotten to add a creditor, that creditor will not be repaid in the repayment plan. You can still have the debt discharged through an amendment in case it was a nonpriority, unsecured debt. Else, the debt will remain until you file bankruptcy again or repay it.

When you want to add forgotten creditors to chapter 7, it typically is not a big deal, because this is one of the hundreds of drawbacks you face as you file bankruptcy. The smartest and most recommended way to address this kind of problem is by filing bankruptcy right the first time only. This is why you need an experienced and trusted bankruptcy attorney to guide you throughout, for example, help you draft your bankruptcy petition, review the creditor matrix, accompany you to the 341 Meeting of Creditors, etc.

Recovery Law Group – a widely trusted consumer protection law firm – offers ZERO DOWN PAYMENT choices for our qualified filers and also a free bankruptcy consultation session the first time. Our attorney will help you take the baby steps toward financial freedom. So, schedule your free bankruptcy consultation now.

Our attorneys offer free consultations to the first time filers. We have helped thousands of filers file their bankruptcies under Chapter 7 and chapter 13 bankruptcies both. We have always put our clients’ interests and constraints before ours. Recovery law Group looks forward to providing you with the affordable bankruptcy in Denver ever.

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Created on Nov 17th 2020 22:55. Viewed 314 times.


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