When you file a bankruptcy case, you must list all creditors in your bankruptcy forms. If you fail to list a creditor, that debt will not be eligible for a discharge. Because a bankruptcy discharge is the ultimate goal of filing for bankruptcy relief, it is important that you list each creditor so that the creditors will be subject to the discharge. Furthermore, the Bankruptcy Code requires that you list all creditors within your bankruptcy. As part of your bankruptcy schedules, you will sign under oath that all of the information contained in the schedules are true and correct. You will also sign a form stating that you have listed all creditors.
The requirement to list all creditors applies to creditors that are not subject to a discharge. Even though most student loans and personal taxes are non-dischargeable, you must still list them so that the creditors receive notice of your bankruptcy filing. The same applies to child support or alimony payments that are current – those must be listed as well. Different types of debt will be handled in different ways; however, you must list all creditors regardless of how the debt will be treated.
Can I Voluntarily Pay Some Debts Back If I List All Creditors in Bankruptcy?
Yes, you can voluntarily pay some debts back even though you list them in your bankruptcy case. Creditors that are subject to the bankruptcy discharge are prohibited from taking any actions to collect debts that are discharged. Your legal liability to repay discharged debts is removed and you are no longer required to repay those debts. Therefore, if you listed your credit card debt and that debt is discharged, the credit card company, collection agencies and their representatives are prohibited from further collection attempts including but not limited to filing a lawsuit, sending letters or calling you to collect the debt. This does not apply to debts that are not discharged such as alimony, child support, most taxes and student loans.
However, if you voluntarily choose to repay a discharged debt, you can do so once your bankruptcy case is completed. Where we see this issue arise is in the case of people who owe family members. Most people do not want to list family members as creditors because they want to repay family members at some point in the future when they finically recover. The key to remember is that you must list all creditors in the bankruptcy but you may voluntarily pay your family members back after the case is closed. (NOTE: You do not want to pay family members back right before filing bankruptcy as the trustee may be able to reverse that payment and take the money back from your family member).
If you are concerned about paying some creditors back, you can discuss this with the attorney during your free consultation. The attorney will explain in further detail how each debt is treated during the bankruptcy and after the bankruptcy discharge.
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Pioletti Pioletti & Nichols represents individuals who need experienced bankruptcy attorneys. With offices located in Eureka and Bloomington, we represent clients throughout Woodford County, McLean County, Tazewell County, Peoria County, and the surrounding communities. We offer free consultations. You can contact our office by calling 309-938-4838.
When you need assistance in Central Illinois with finding a solution to debt problems, call the compassionate and skilled attorneys of Pioletti Pioletti & Nichols. We are dedicated to giving our clients exceptional service and support throughout the bankruptcy process.