Filing for bankruptcy is a stressful time. As part of the process you are asked to provide your bankruptcy trustee with a list of your creditors, how much you think you owe on each debt and a list of your assets. Can you forget one or two? It happens, and the fact that a creditor didn’t appear on your official bankruptcy documents does not, in and of itself, cause any problems.
What happens next depends on the circumstances of the omission.
The most common scenario is that someone honestly forgets about one of their debts when filling out their bankruptcy application. A typical example might be an overdrawn bank account that they haven’t used for a few years. If you become aware of the debt while you remain in bankruptcy, all you need to do is inform your trustee so that the creditor can be sent the appropriate documents. In the majority of these cases the creditors actually find out about the bankruptcy themselves (usually because of another debt with you) and contact the trustee on their own. Regardless, no harm was done and the debt simply gets included in your bankruptcy along with all of your other debts.
But what if you don’t discover the debt until after you have completed your bankruptcy? In these cases, your creditor is entitled to the same rate of return that all of your other creditors received from the bankruptcy. For example, if all of the previously disclosed creditors received $0.10 on the dollar for their debts then the newly discovered creditor is entitled to the same $0.10 on the dollar for their debt. Since the vast majority of personal bankruptcy result in no payments to a person’s creditors, in most cases the new creditor is entitled to nothing. You simply send them proof of the bankruptcy, proof you have completed it properly, and proof of what the other creditors received.
A less common and more problematic scenario is one in which the person that filed for bankruptcy deliberately left a creditor off their list. This can result in a lot of trouble.
If the creditor can prove the person that filed ought to have reasonably known about the debt and therefore in all probability made a conscious decision not to list the debt on their bankruptcy forms then the creditor can argue that the debt should survive the bankruptcy process. Further, if this matter is brought before the Court, the Court could decide to question the original intent of the person that filed for bankruptcy. The Court has the right to impose whatever terms they want in order to complete a bankruptcy. In extreme cases the Court has the right to refuse to grant a discharge from bankruptcy if they think the person that filed has been less than honest in their dealings with their creditors, their trustee, or the Court.
So, for the people that made an honest mistake, the fact that a creditor didn’t appear on the official documents does not cause any serious problems. You should not be worried if you can’t recall every single debt when talking to your trustee. Make your best efforts, and advise your trustee ahead of time if you are concerned. They can provide you with some information on how to complete your bankruptcy forms as fully and honestly as you can.