Do I Have to Provide a List of Creditors in My Bankruptcy?

Often people want to exclude creditors from their list of creditors included in their bankruptcy schedules. Some people wish to avoid informing various creditors of the bankruptcy, others wish to not cause problems with their relationship with the creditor, and some other want to pay back the debt to that specific creditor. While these reasons may have merit, the general rule is to provide a complete and accurate list of creditors in the bankruptcy schedules.

The primary reason for listing all debts is for the discharge purposes. If a debt is not listed on the bankruptcy schedules, it will not be discharged. Attorneys generally advise that a discharged debt is best. Even if you are on good terms with the creditor now, if things go sour or there is some change in the relationship, being able to walk away from the creditor is an excellent option to have. Given that you can only receive discharges so often with up to eight years following a chapter 7 to receive another, taking advantage of the opportunity when it is presented will prevent future problems.

If you have a discharged debt, you can still repay it after the bankruptcy. If a debtor insists that they repay a particular creditor, they may freely pay back any money from a former debt even though a bankruptcy discharge occurred. During the bankruptcy you aren’t allowed to provide preferential payments to creditors, but afterwards you are free to do so. In other words, if you absolutely feel that you must repay that debt, the bankruptcy filer is not prevented from doing so after the case is closed. There is no reason not to list creditors since you are free to repay them.

It is unlawful to fail to file a complete list of creditors to the bankruptcy court. When you finalize your bankruptcy petitions, you sign under penalty of perjury that you have listed all of your creditors. It is a Federal crime to commit perjury in bankruptcy cases. If you know of a creditor and fail to list them, then you are committing perjury. It is always best to avoid criminal actions and this is no exception.  Furthering this point, some creditors are considered “insiders” and they have special rules about how and when they could be paid before the bankruptcy is filed. If a trustee discovers that there were payments made to insiders prior to the bankruptcy that were not properly disclosed, then the debtor can be charged with bankruptcy fraud. If a person is convicted on Federal perjury or bankruptcy fraud charges they can receive a sentence of up to 5 years. As such, it is better to be completely upfront with the list of creditors and any special treatment they received. If you are unaware of a creditor, or you have reason to believe that the list is complete, then you will have committed perjury. That said, it’s best to be careful and perform your due diligence by searching for all creditors.

In the event that you fail to list a creditor, you can add them into the case after the initial filing. When you add a creditor, it is your obligation to meet any and all notice requirements. Usually there is also a filing fee charged by the clerk, although it is far less than the initial fee.

Overall, there is benefit to the debtor to disclose all of their creditors and this are potentially severe penalties for failing to disclose the complete list of creditors. As always, consult with your attorney about disclosing creditors and who should be included in that list.


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