What will happen when you omit a creditor from BK (bankruptcy) mail matrix? What will be the possible drawbacks of not listing all your creditors in the court filed BK paperwork? This article considers the possible issue and the way you can correct it.
This is one of my many judgment-related: I'm the Judgment referral expert, not an attorney. This article is only my opinion based on my long term experiences, please hire an attorney when you require legal advice.
Usually, an unsecured creditor is not allowed to collect your debt, some time after a successful BK discharge.
Your BK papers has the addresses and names of the balances due, the creditor's names, and some additional info concerning all your debts. Depending on the BK circumstance, not listing all the creditors in the BK mailing list might then create financial complications for a BK.
The impact of this possible issue depends on if you are in a Chapter 13 or 7 BK, if the creditor(s) are unsecured or secured, and whether or not the Chapter 7 BK is a no-asset or an asset case. Not listing creditors in your creditor mailing matrix may turn out to be expensive or be just fine.
A mailing matrix, often named the creditor mailing list is arranged alphabetically, of each of BK creditors. The BK court will send a letter concerning the BK filing to every person or entity on the BK matrix list. When the creditor doesn't get any notice about the filing of the BK case, the creditor will lose the opportunity to attend the BK.
Some folks omit creditors on purpose on the mailing matrix, or their debts on the BK paperwork. That kind of withholding of information may be a huge financial problem.
You sign your BK paperwork under the perjury penalty. When one intentionally omits their debts or creditors, they will be not telling the truth to your BK court. If that court discovers this, they'll most likely deny the BK case.
How can one be certain that your BK court correctly listed every creditor in your BK mailing list? Look closely at your mailing matrix, and match it line by line to your creditor listing on the BK paperwork.
One may also make sure that you've listed every one of the creditors, by looking at your credit report. Certain debts won't be on a credit report, so don't depend totally on a credit report while filling out your BK creditor and debt listings.
What will happen if you don't put your creditors in your Chapter 7 mailing matrix? What will happen depends on if you've got an asset or no-asset BK case.
With a no asset Chapter 7 BK case, there's insufficient money available for a BK trustee to give any money to the secured or unsecured creditors and, you don't own assets or property which a BK trustee will be able to sell.
Unsecured creditors don't have to be filing any proofs of claim(s) with a no asset BK case. Because no claim is needed, leaving a creditor off doesn't alter their very small chance to be repaid any money.
But, with a no asset BK situation, when you do not include secured creditors, creditors might sometime later (maybe when you later inherit a property) take actions legally like repossession, foreclosure, or a garnishment; to recover their debt when you get your BK discharge.
With Chapter 7 BK cases having available assets, not listing creditors may become more financially problematic. When a creditor doesn't get any any notice about your BK filing, that creditor will lose any opportunity to file their proof of claim, and any chances to get payment from the BK case.
With BK cases with assets, not sending notice to creditors allows a creditor to recover nonexempt assets and money from you when you get your BK discharge.
What will happen if onefails to include creditors on a Chapter 13 BK court filing? When one fails to put creditors that should be included the Chapter 13 case, that creditor won't be informed of your BK application, and your debt owed to the creditor won't get exempted at the end of a BK case.
If you will be including all of your debts on a Chapter 13 plan, the court plan will automatically handle the payment of all your debts, instead of putting control of the repayment to a creditor. Collection after discharge can be serious because when you have a completed repayment plan, you might still be owing any creditors you didn't include in the Chapter 13 BK case.
What can one do when they discover that they should have added a creditor to their BK mailing list? Most of the time, you'll be permitted to include the new debt to the BK if you file the paperwork at your court which tells why you omitted the creditor.
Your filed BK paperwork needs to list the needed info concerning the new debt(s), and if the new debt will have an effect on the BK case. When including the new debt effects the case, you might have to amend the Chapter 13 plan or a Statement of Intention in a Chapter Seven (asset) case.
With all bankruptcies, it's smart to first do some research and think carefully, prior to signing and filing your BK petition.
Mark Shapiro - Judgment Broker - http://www.JudgmentReferral.com - where Judgments go and are quickly Collected!