What happens to debt you don't claim in bankruptcy?

Answer 1

The legal process and system is demanding even for those experienced with it. Many of your creditors will have an attorney to assure they get as much as possible, even groups of lawyers, who specialize only in bankruptcy. Simply you should/better/need to have one too.

The above is correct to a point, since it all depends upon the type of BK a person files; and his or her own individual case. Some will be more involved, more complicated than others. For a good many cases, however, it is a straightforward process. The "warning"above is way over the top and seems put forth as a "scare tactic" of sorts.

For example, if a person, after a BK discharge, discovers new properties, assets, the procedure is to notify the Trustee via a letter. The Trustee would then decide the next move, whether or not to reopen the BK case. The Trustee AND the court would have to determine that the newly discovered property or assets are worth the time of pursuit. That would be a relatively high standard.

Another example might be if you realize you inadvertently did not include certain creditors. If that's the case, then:

1. If your case is still open, then you simply amend your original list

2. If it's after BK discharge, and the creditor had actual knowledge that you filed BK, then it's the same as if the creditor was actually listed in your papers.

3. If your omitted creditor did not have knowledge, the chances are HUGE that the debt will be considered discharged. This especially true if the case was a no assets case.

In a goodly number of cases, the no assets kind, it is even a good idea to consider going PRO SE. If a person can fill out his or her income taxes, he or she should have no difficulties filing a BK7 no assets, and saving a couple of thousand bucks that would have gone to an attorney.