Copyright (c) 2014 Mark Shapiro
What will happen when you leave a creditor off your bankruptcy (BK) mail matrix? What are the consequences of not listing a creditor in your court filed BK paperwork? This article considers the possible problem and the way to correct it.
This is one of many judgment articles: I am the Judgment Broker, not a lawyer, and this article is my opinion based on my experiences, please hire an attorney if you require legal advice.
Generally, an unsecured creditor is not allowed to collect their debt, after your successful BK discharge.
The bankruptcy papers contain the names and addresses of the balances due, the creditor's names, and some other info concerning your debts. Depending on the bankruptcy situation, failing to list all creditors in your BK mailing list may then cause significant problems in a BK case.
The seriousness of the possible issue depends on if you are in a Chapter Thirteen or 7 BK, whether the debt is unsecured or secured, and whether or not the Chapter Seven bankruptcy is a no-asset or an asset case. Not listing creditors on your creditor mailing matrix might be just fine, or can become expensive.
The mailing matrix (also called the creditor mailing list) is a list, arranged alphabetically, of each of creditors. The court sends notice about the bankruptcy filing to every person or entity on the BK matrix list. When a creditor doesn't get any notice of the filing of the BK case, the creditor will lose the chance to attend your bankruptcy.
Some folks intentionally omit creditors from the mailing lists, or their debts from the BK paperwork. This kind of withholding of information can become a huge problem.
One signs their bankruptcy paperwork under the perjury penalty. When you intentionally omit a creditor or debt, you will be not telling the truth to the court. If the court discovers this, they will probably deny the bankruptcy case.
How can you be sure the bankruptcy court correctly included every creditor in your mailing list? Carefully review the mailing matrix, and compare it to the creditor list on your BK schedules.
You can also make sure that you've listed every one of your creditors, by reviewing a recent credit report. Some debts won't be listed on a credit report, so don't rely entirely on your credit report when filling out your BK debt and creditor lists.
What happens when you do not put a creditor in your Chapter 7 mailing matrix? What will happen depends on whether you have an asset or no-asset BK case.
In a no-asset Chapter Seven bankruptcy case, there is insufficient money available for the trustee to distribute any money to your secured or unsecured creditors and, you don't own assets or property which a BK trustee will be able to sell.
Unsecured creditors do not need to be filing any proofs of claim(s) in a no asset BK case. Since no claim is needed, omitting a creditor does not change their tiny chance to get paid anything.
However, in a no-asset BK situation, if you fail to list a secured creditor, creditors may later (perhaps when you inherit a property) take legal actions like foreclosure, repossession, or a levy; to recover their debt after your bankruptcy discharge.
On Chapter Seven bankruptcy cases with available assets, not listing creditors can be more problematic. If the creditor does not get any notice of the bankruptcy filing, that creditor will lose their chance to file a proof of claim, and any chances to receive payment from your BK case.
With bankruptcy cases with assets, not noticing a creditor entitles the creditor to collect money and nonexempt assets from you when you get the BK discharge.
What will happen if onefails to include creditors on a Chapter 13 bankruptcy court filing? When one fails to put creditors in a Chapter 13 case, the creditor will not be informed of the bankruptcy filing, and your debt owed to the creditor will not be discharged at the end of a BK case.
If you will be including all of your debts on a Chapter Thirteen plan, the court plan will take care of the payment of your debts, rather than putting control of repayment to a creditor. Collection after discharge is serious because after your completed repayment plan, you may still be owing the creditors you did not include in your Chapter Thirteen bankruptcy case.
What should you do if you discover that you have omitted creditors from your BK mailing list? Usually, you'll be permitted to include the new debt to your BK by filing the paperwork at your court which explains your omission.
Your filed bankruptcy document needs to provide the required info concerning the new debt(s), and state if the additional debt will have an effect on the BK case. When including the debt affects the case, you may need to amend the Chapter Thirteen plan or a Statement of Intention in a Chapter Seven (asset) case.
In all bankruptcies, it is best to think carefully and do some research, before you sign and file a BK petition.
Article Source: http://www.abcarticledirectory.com
Mark D. Shapiro - Judgment Broker - www.JudgmentReferral.com - where Judgments go and are quickly Collected!
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