The Federal bankruptcy code requires that debtors list their creditors in their bankruptcy petitions. That is to include the name and address of the creditor, the account number where available and the amount of the debt. One reason is to give the creditors notice that the debtor has filed the petition, because the bankruptcy proceeding can affect the creditor’s rights. For example, in a Chapter 7 case, the outcome may be that all of the debts of the filer may be discharged (extinguished). In a Chapter 13 case, the creditor may receive funds from the Chapter 13 trustee through the debtor’s plan, provided that the creditor files a proof of claim with the bankruptcy court.
As an experienced Middlesex County bankruptcy attorney, we always have our debtor clients complete a worksheet in which they list all of their creditors. Also, with their written consent, we will obtain a credit report which also lists creditors.
What happens when the debtor fails to list a creditor?
Not to worry. While the Chapter 7 debtor must always make best efforts to list all creditors, any omitted creditor is treated under the bankruptcy code as if it was listed, and their debt will be discharged. This was established many years ago in a Third Circuit opinion in the case of Judd v. Wolfe. The court noted that this result was consistent with the intent of the Federal bankruptcy code to give debtors a fresh start.
Please feel free to contact us today to discuss whether filing bankruptcy is right for you.