Although you may have a general idea of who all your creditors are, it's not uncommon to have unknown or forgotten creditors. Additionally, you may be liable as a co-debtor on an account you were not aware of. Moreover, if you are, or have been married in California, community property laws can create additional debt liability for which you may also be responsible. Because all creditors are entitled to proper notice of your bankruptcy, it is important that they are known at the time of filing. When creditors are unknown, the potential problem exists of these creditors not receiving their entitled notice and opportunity to be heard.
When your California bankruptcy petition is prepared, an experienced California bankruptcy attorney should perform their due diligence in attempting to determine all of your creditors. This is typically done through obtaining your credit report from one of the three major credit reporting agencies, namely Experian, Equifax or TransUnion. At the Chernev Firm, we have access to all three of these major reporting agencies, and we will run your report from all three agencies, to assure that we know who all of your reported creditors are. This helps to maximize the amount of your dischargeable debt and to minimize potential legal problems and delays along the way.
Sometimes, however, a creditor is neither listed on a credit report nor known by a debtor. As a result, after a bankruptcy discharge is granted, this creditor may come forward and make a claim regarding a debt you were unaware you were liable for. They will argue since they were not afforded proper notice and opportunity to be heard, their debt should not be discharged. In the majority of cases, however, even if an unknown creditor does not receive notice of your bankruptcy filing or discharge, you most likely will not be liable on the debt.
The vast majority of bankruptcy filings are considered "no asset" cases, because there are no assets from the bankruptcy estate to be distributed to creditors. As a result, even if a creditor is mistakenly left off from a bankruptcy filing, and does not receive notice, since there were no payments paid on any of the claims, an unknown creditor is unable to show damages of lost payments. Since there was nothing to go around, they cannot argue they didn't get anything. This "super discharge" enables no asset debtors to receive a bankruptcy "super discharge" which includes not only the debts listed in their bankruptcy petition, but those who may have been mistakenly omitted as well.