Under the current law, a debtor is required to file “a list of creditors” in his bankruptcy petition. The name, address, and an estimate of the amount of the debt/claim are listed in specific forms called “schedules” in the bankruptcy petition. All debts and claims must be listed either in Schedule D (claims secured by property), Schedules E/F (unsecured claims, priority or non-priority), or Schedule G (executory contracts and unexpired leases).
The schedules likewise require the debtor to state the last 4 digits of the account number, whether or not the debt/claim is a community debt, subject to offset, contingent, liquidated or disputed, among others.
What happens if one or more debt/claim is omitted in the bankruptcy petition?
If the case is still pending, the debtor can simply amend the schedule/s to include the omitted claim/s. For a small filing fee, the omitted creditor is included in the petition and a notice of the bankruptcy filing is sent to it.
If a case is already closed, the option to amend is no longer possible, unless the court allows the re-opening of the case. The general rule is contained in 11 U.S. Code § 523 (a) which states that a discharge order granted in a bankruptcy petition will not “discharge an individual debtor from any debt” if it is not listed or scheduled in the petition, unless the creditor had “notice or actual knowledge of the case”. Necessarily, the burden of proof on whether or not the creditor had notice lies on the debtor.
However, the Ninth Circuit (which covers California, Nevada, Oregon, Washington, among others) in Beezley v. California Land Title Co. (1993) ruled that an omitted debt in a no asset, no bar case is still considered discharged. In this case, there was no asset of Beezley for the trustee’s liquidation and distribution (thus called a no-asset case). Hence, the court ruled that re-opening the case for Beezley to include the omitted debt would be useless because the omitted creditor would not be paid anyway.
The rule above does not contemplate debts which are considered non-dischargeable in the first place, whether listed or not, such as those obtained by false pretenses, false representation, or actual fraud, or those arising from willful and malicious injury by the debtor to another entity or to the property of another entity.
In conclusion, it is to the debtor’s interest to make sure he has a complete list of all his creditors prior to filing. He should secure a copy his credit report, which is a detailed summary of a person’s credit history, from the three (3) credit agencies. He should include all debts, whether disputed or not. As they say, better safe than sorry.