Chapter 7 bankruptcy is one tool for escaping the mountain of debt you may be toiling under. However, the bankruptcy court can only eliminate eligible debt reported on the petition. Anything not included on the list of creditors will continue to be owed after the case concludes, which can potentially inhibit your financial recovery. It's not the end of the world if you forget to include someone, though. Here are two things you can do if you find you inadvertently left a creditor off your bankruptcy schedules.
This may seem like counter-intuitive advice. After all, discharging a debt in a chapter 7 bankruptcy prevents the creditor from attempting to collect the money from you, which is the primary point of filing bankruptcy in the first place. Letting a creditor escape the proceedings may only invite financial pain and anguish in the form of annoying phone calls and lawsuits at a later date.
In some situations, though, doing nothing is a viable course of action. For instance, some bankruptcy jurisdictions will still discharge unlisted debt if the debtor has no money or assets that the bankruptcy trustee can use to pay creditors, otherwise known as no-asset bankruptcy cases. As long as the debt is eligible for discharge (e.g. credit card debt, personal loans), an unlisted creditor will be barred from continuing to collect just like any other creditor placed on the bankruptcy schedules.
Another situation where doing nothing may be a good option is if you would remain judgment-proof—i.e. you still won't have any money or assets the creditor can grab—even after your bankruptcy case concludes. In this case, the creditor may feel it's not worth the money or effort to continue collecting on a debt when the debtor has nothing valuable to cover any judgment it may receive from a lawsuit.
Be aware, though, that unless the statute of limitation for collections has passed for a particular debt, the creditor can still come after you anytime your judgment-proof statues wears off, so it may help to speak to an attorney about chapter 7 bankruptcy law before employing this option.
Reopen Your Case
If your jurisdiction doesn't automatically cover omitted debts in no-asset cases or your case otherwise doesn't qualify, your other option is to amend your case (or reopen your bankruptcy case if it's been settled) and add the creditor. This is often easier said than done.
Amending an open case is the easiest option, but you may be charged an additional fee, and it can cause delays as the court notifies the affected creditor and allows it time to respond. Reopening a closed case to include a missing creditor can be challenging because you'll have to provide the court with a good reason why the creditor was omitted in the first place. It can be a tossup sometimes whether the court will accept your reasoning and approve the change.
Regardless of which option you choose, it's best to discuss the issue with a bankruptcy lawyer to ensure it's the right one for your situation.