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Can debt from an unlisted creditor still be discharged?

Stockton, CA |

I filed Chapter 7 in 2010 due to excessive medical bills (cancer). I have recently started receiving notices and phone calls regarding a debt from 2009. This is a creditor I did not list in my bankruptcy as I did not know the debt existed at the time of filing. Is it still dischargable? Do I have to file an amendment to my original filing, or can I just send the creditor my case number? They're threatening to take legal action if I do not pay and, quite honestly, I cannot afford to pay this.

Attorney Answers 4


  1. First, we will need to know if you were a no asset chapter 7 bankruptcy case. This means that no assets were taken from you or liquidated for the benefit of your creditors by the trustee. Most cases are no asset cases, although, this information is very important to answer your question properly. If you were an asset case, then, unfortunately, no, this debt was not discharged. However, if you were a no asset case, and the debt arose prior to your bankruptcy filing, it likely was discharged (although this differs in different jurisdictions and I do not practice in CA). You can write them a letter indicating that you filed for Chapter 7, the date of your filing, your case number and that no assets were distributed to any creditors and therefore, their debt was discharged. If they are persistent, you can reopen the case and include the creditor (although there is a fee for doing so).


  2. If the Trustee did not distribute any of your assets to creditor, there was no harm caused from you inadvertently failing to list this debt. The 9th Circuit, which covers California (and Nevada) case making this decision is called In re Beezley, and is published at 994 F.2d 1433 (9th Cir. 1993). You can also easily find this case and more information about it by doing an internet search.

    Hope this perspective helps!


  3. If your bankruptcy case was determined to be a "No Asset" case (meaning there were no assets to distribute to creditors) all dischargeable debts were discharged, whether they were listed or not, as least in most (every?) district.

    Unlisted debts are still discharged. However, since they never received notice of your filing, they are not violating the Order of Discharge. Your bankruptcy discharge is an affirmative defense to any court action taken against you. However, once you become aware of an unlisted creditor, you should immediately send that creditor a notice of your filing along with a copy of the Order of Discharge. You can also file a Proof of Service with the Bankruptcy Clerk to document this notice.

    Once the creditor has actual notice of your filing, the Discharge Order is effective and they violate that Order if they take action to collect on the discharged debt.

    I hope this helps.
    Respectfully,
    Steven A. Leahy
    www.chicagotaxteam.com

    Please note that the above is not intended as legal advice, it is for educational purposes only. No attorney-client relationship is created or is intended to be created hereby. You should contact a local attorney to discuss and to obtain legal advice.


  4. In general the answer is no after you have obtained a discharge from the listed debts. However, if the unlisted debt is huge and you cannot pay it and you have not obtained your discharge, the best thing to do is not to attend the meeting of creditors and allow the chapter 7 trustee to move for the dismissal of your case without prejudice. You can then refile the bankruptcy case and list the omitted debt. If you refile, you must also apply to the bankruptcy court to continue the automatic stay immediately because it will expire 30 days after the petition date.

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