How can an unsecured BUSINESS LOAN be discharged in a Ch 7 Bankruptcy case when the filing DID NOT list my name as CREDITOR.

Asked almost 4 years ago - Montgomery, AL

I was named in the CH.7 Case in 2007 as CREDITOR on a SECURED loan,which was reaffirmed. Now the DEBTOR claims that an UNSECURED BUSINESS LOAN,not listed in the same filing,was DISCHARGED. Since I was NOT listed as a CREDITOR of ANY UNSECURED LOAN & since the loan was a BUSINESS LOAN,not permitted by the US COURT Rules to be discharged on a CH.7 ,what can I do to deny that this DISCHARGE applies to my loan? The Debtor claiming that his monthly payments are being made towards the reaffirmed home mortgage loan for the last 35 months,and NOT to the BUSINESS LOAN. Monthly payments being made are the amounts due on the B.LOAN higher than any Home Loan payment & by verbal agreement,to be paid on pending a re-fi Mtg .by the debtor in 2007 & never done,

Attorney answers (2)

  1. Robert John Murillo

    Contributor Level 19

    Answered . You state at first that this debt is unsecured and then say it was secured. It does not matter if the loan is for business as these may be just as dischargeable as an unsecured personal loan. If it was secured, then it can’t be discharged, normally, but I suspect that this loan was not secured properly. In many jurisdictions, if the case was a no-asset Chapter 7, then all dischargeable debts may be wiped out regardless if they were not actually listed in the filing. This, as I noted, depends on the jurisdiction and more facts. As to reaffirming a debt, reaffirmation means a rather specific process under bankruptcy law. It is not the debtor merely telling someone that they will pay.

    In short, to have an idea of what to do and your options will require you to talk to a local bankruptcy attorney and provide them all facts and relevant documents. Good luck.

    DISCLAIMER—This answer is for informational purposes only and discusses general legal principles, trends, and considerations and is not intended as specific legal advice regarding your question. This answer does not establish an attorney-client relationship.

  2. Stanley Duane Lockhart

    Contributor Level 14

    Answered . If the Debtor's C7 case was a no asset finding by the Trustee, then your unsecured is discharged whether you had notice or not....

    'No asset' is a term that means debtor was able to exempt/protect all of his assets and the trustee elected not to try and collect or sell any excess assets.

    Your secured debt is being paid or you can recover thru state law remedy.

    I hope this whole thing in over a small debt ... or get yourself some professional help.

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