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Debtor Forgets to List Creditor Almost Loses Discharge

Posted By admin || 8-Jun-2009

In the bankruptcy case of debtor J. Reed, creditor West Texas Truck Center, Inc. was inadvertently left off of Reed's creditor list.  It was only after the creditor West Texas Truck Center filed a lawsuit against Reed that she added the creditor to her bankruptcy case.  That's when the creditor filed a motion to deny Reed's discharge of the debt ($5,197.52).

Initially Reed's debt was made "non-dischargeable" by the bankruptcy court; but the ruling was eventually overturned.

The court said that:

  1. The debtor did not omit the creditor with intentions of fraud or ill-motives.
  2. The debtor's failure to include the creditor in her bankruptcy case did not significantly disrupt the bankruptcy process.
  3. The debt would not have been found non-dischargeable under any provision of the bankruptcy law.

It is very important to check your creditor's list carefully when filing bankruptcy.  If a debtor files bankruptcy and omits a creditor, they will probably attempt to use that omission as grounds for making the debt non-dischargeable.  Yes, you can fight the creditor bankruptcy court but it will cost you time and money.  Save yourself some headaches and list all creditors properly when you initially file bankruptcy.

Categories: Bankruptcy
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