When you file for consumer bankruptcy, you must list all your outstanding debts on specific official forms, called Schedules D, E, and F. Understandably, you may be in a rush to get this paperwork submitted so that you can be granted protection from your creditors’ aggressive collection activities with the court’s automatic stay order. While you may be desperate for this relief, it is still important to ensure you fill out these forms properly. With that being said, please continue reading to learn what happens if you forget to list a certain debt and how an experienced Rockland County bankruptcy attorney at The Law Offices of Allen A. Kolber, Esq., P.C., can help you rectify this error when possible.
What happens if I forget to list a debt in my bankruptcy paperwork?
You must understand that your bankruptcy schedules are legally sworn documents. So if you make any omissions regarding your debts, even if done unintentionally, this suspicion of concealment may be taken very seriously and prompt an inquiry by your appointed bankruptcy trustee. Here, you may have to attend a mandatory meeting, in which your trustee may review your financial records, verify all your assets and debts, investigate your recent transactions, etc. In the end, your trustee may identify non-exempt assets to potentially liquidate and sell to pay back the creditors that you initially left out.
At the very least, forgetting to list a debt in your bankruptcy paperwork may make it ineligible to be legally wiped out at your case’s close, even though on paper it can be classified as a dischargeable debt. This is to say that the credit associated with this debt may legally resume collection activities, and you may be financially responsible for paying it off in its entirety. The only exception here may be if you opted for a no-asset Chapter 7 bankruptcy case, in which you do not possess significant non-exempt property that could have been used to reimburse creditors. This is because your creditors would not have received funds anyway, even if your debt was listed properly.
Can I add a forgotten debt after filing my bankruptcy paperwork?
If you catch that you accidentally missed a debt in your bankruptcy paperwork, you should not sit idly by and hope the error goes unnoticed. Rather, you must take action while you still have the chance to, and file an amendment with the New York State bankruptcy court that discloses the omitted debt. If your case has already reached the discharge stage, you may file a motion to reopen the bankruptcy, along with submitting a reopening fee. However, this motion may only be granted if you can prove that a retroactive discharge would not unfairly change the outcome of your case, such as depriving or reducing other creditors of money they would have otherwise received.
There is no need to wait any longer to hire a skilled Rockland County bankruptcy attorney if you are already ready to get on with your bankruptcy case. Reach out to our law firm, The Law Offices of Allen A. Kolber, Esq., P.C., at your earliest possible convenience.
