If you forgot to list a creditor in your Chapter 7 bankruptcy case, you are not alone. It happens more often than most people realize. Many people discover an old medical bill, collection account, payday loan, or credit card after their bankruptcy paperwork has already been filed. In most cases, this problem can be addressed without major complications.

Most Creditors Already Know About Your Bankruptcy Filing, Even if you Forgot to List Them

Today, most creditors do not rely solely on the bankruptcy schedules filed with the court to learn about a bankruptcy case. Credit bureaus, collection databases, and electronic bankruptcy monitoring services often notify creditors shortly after a case is filed. As a result, a creditor you accidentally omitted from your bankruptcy petition may already know about your bankruptcy filing even if they were not formally listed in your schedules.

That is especially true with large banks, credit card companies, medical collection agencies, and debt buyers that routinely monitor bankruptcy filings nationwide.

If Your Bankruptcy Case Is Already Closed

If your Chapter 7 case has already been completed and closed, you often do not need to panic. In many situations, you can simply mail the creditor:

• A copy of your official bankruptcy notice;
• A copy of your discharge order; and/or
• Your bankruptcy case number and filing information.

Once the creditor receives notice of the bankruptcy discharge, many collection efforts will stop immediately.

No Asset Chapter 7 Cases and In re Madaj

If your case was a “no asset” Chapter 7 case, the law in the Sixth Circuit is particularly important. Under the Sixth Circuit decision in In re Madaj, an omitted debt in a no asset Chapter 7 case is generally still discharged even if the creditor was not originally listed in the bankruptcy schedules.

A no asset case means the bankruptcy trustee did not distribute money to creditors because there were no nonexempt assets available for liquidation. The vast majority (upwards of 98%) of the Chapter 7 cases I file are no asset cases. Since creditors would not have received a distribution anyway, courts in the Sixth Circuit have held that reopening the case simply to add a creditor is often unnecessary.

This rule can provide significant protection for debtors who unintentionally omitted a creditor from their bankruptcy paperwork.

If Your Bankruptcy Case Is Still Open

If your Chapter 7 case is still pending, you may wish to formally amend your bankruptcy schedules to add the omitted creditor to the case. Filing an amendment provides formal notice to the creditor and creates a clearer court record showing that the debt was included in the bankruptcy.

To amend the schedules, your attorney typically files:

• Amended bankruptcy schedules;
• An amended creditor mailing matrix; and
• A notice to the newly added creditor.

There May Be Attorney Fees and Court Costs

Clients should understand that amending bankruptcy schedules is not always free. There are often:

• Attorney fees for preparing and filing the amendment; and
• Possible court-related costs associated with the amendment process.

The exact cost depends on the complexity of the case and whether additional motions or notices are required.

Do Not Ignore Collection Attempts

If an omitted creditor continues collection activity after learning about your bankruptcy discharge, you should promptly speak with your bankruptcy attorney. Continuing collection efforts on a discharged debt may violate the bankruptcy discharge injunction.

Every bankruptcy case is different, and the best course of action depends on whether the case is open or closed, whether it was a no asset case, and the type of debt involved.