Skip to main content

Question: Not listed as Creditor but later found out about the Bankruptcy. What to do?

Posted by attorney Javed Ellahie

A debtor may, on purpose or in a moment of forgetfulness, forget to list a creditor in the bankruptcy petition and the creditor may never find out about the bankruptcy until it takes steps to collect on the debt owed by the debtor. The filing of a bankruptcy operates as a Stay under 11 USC 362 against the whole world, even against those who do not or cannot know about the filing!

A creditor who has actual knowledge of the bankruptcy, either as a result of the notice received from the debtor or the court, or in any manner, will be held responsible for violating the stay, while one that doesn't know about the filing is still subject to it, although, stay violations by such a creditor may be excused if lack of knowledge of the filing can be established.

A creditor who does not know about the bankruptcy must stop any litigation that it has commenced as soon as it learns about the bankruptcy unless it goes to the bankruptcy court and asks the Judge for permission (Relief from Stay) to continue with the non bankruptcy action. A bankruptcy court will generally not grant it relief from stay unless there are substantial/overwhelming considerations allowing the case to go forward outside the bankruptcy court.

So if a creditor has a legitimate claim it should file a proof of claim within the deadline set for filing claims in the bankruptcy court. Claims must be filed within 90 days after the first date set for the 341 meeting or approx 4.5 months after the petition was filed. Of course, if the creditor does not find out about the bankruptcy until this deadline has passed, the creditor should still file a claim and if an objection is received on the grounds that its claim was a "late filed claim", it can ask the court to overrule the objection because it was not provided with timely notice of the bankruptcy. The Bankruptcy court may grant such a motion if it is filed promptly after the creditor has found out about the bankruptcy and there is no evidence that notice was actually sent to the creditor.

Creditors who wish to pursue claims for fraud and for other non-dischargeability grounds enumerated in 11 USC 523: , and other similar provisions in the bankruptcy code must do so within the time limit fixed under Bankruptcy Rule 400, which is 60 days from the date first set for the 341 (or approx 3.5 months).

A creditor who did not learn about the bankruptcy until after this deadline has passed, must move the move the court to allow it to file the "late" complaint and should do so promptly i.e. as soon as it has actual notice or it risks denial of its motion to file such a complaint. Creditors should note that, recordation of the bankruptcy filing with the County Recorder, constitutes actual notice, at least for real property transactions.

To find out the EXACT deadline dates it is important to review the 341 notice, or the Notice of Meeting of Creditors, that is filed in a case.

Additional resources provided by the author

Author of this guide:

Was this guide helpful?