Missing a Creditor in Bankruptcy? What to Do

Hi, everybody. Today’s video summary is about what happens if a creditor is not listed on the bankruptcy petition and the effect of the automatic stay.

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Congratulations! You are taking those steps to a fresh start and financial freedom, but there’s a problem. A creditor keeps calling you, and obviously, this is a clear violation of the automatic stay. You wonder if the creditor got the “memo” about the bankruptcy.

You review your Chapter 7 petition and realize one credit card company slipped through the cracks. The bankruptcy clerk approved the petition, so what happens now with the missing creditor? Does this debt have to be paid back? What if you can’t afford it? What are your options? Don’t stress it. This video explains the process for you.

What Happens When Creditors Are Omitted from the Bankruptcy Petition

Oops! Missed a creditor in your Chapter 7 bankruptcy? No worries; it happens to the best of us. But now what?

There are two scenarios to consider. First, your case remains open, and the judge hasn’t discharged your debts yet. Then, it’s just a matter of amending your petition to include the missing creditor. Make sure to check your local bankruptcy court’s website for specific forms and procedures. Amending the petition usually doesn’t require another meeting of creditors. But what if the court approved your bankruptcy?

The Bankruptcy Discharge

If your petition is approved, the judge signs the Order of Discharge. At this point, your case is closed. So the issue is, were any assets distributed?

If the judge already discharged your debts and your case didn’t involve any assets to be distributed, courts have ruled it’s a waste of time to reopen the case to add a creditor who wasn’t receiving anything to begin with. It does make sense. The creditor lost nothing, so why flood the courts with hearings to add creditors who aren’t entitled to anything anyway?

But what if there were nonexempt assets that were distributed? Then the creditor did miss out on their share. If the amount was minimal, they might not pursue further collection efforts. If the sum is significant, you could try to reopen the case (with the assistance of a bankruptcy lawyer) or negotiate a settlement with the creditor.

• Relocating? Which State Exemptions Should You Use?

Now, the creditor is calling to demand payment. Panic starts to kick in. You’re concerned that you have to pay back this debt. Don’t worry. Calm down. Take a deep breath. Namaste.

You’ll be fine. Don’t stress this!

The Bankruptcy Process

Once the bankruptcy petition is filed, the automatic stay prevents most lawsuits from moving forward. So wage garnishments, foreclosures, etc., are “stayed.” This means the lawsuit can only move forward under specific circumstances.

However, the automatic stay does not apply to domestic support obligations, such as alimony/spousal support and child support issues in family court.

In a prior video and blog post, I discussed the issue where family court judges continue to delay cases when bankruptcy is filed, and the hearings are related to spousal support or child support. They’re not supposed to do that. But unfortunately, that is a regular occurrence.

The Fair Debt Collection and Practice Act

The next thing to focus on is the Fair Debt Collection and Practice Act. The FDCPA protects you when it comes to debt collection tactics. Once bankruptcy is filed, creditors are not allowed to contact debtors, thanks to the automatic stay.

Those harassing calls should stop automatically. But one creditor keeps calling, and that’s when you realize you forgot to list the creditor. So, the creditor never received notice of the bankruptcy filing.

What Happens When a Creditor is not Listed in the Bankruptcy Petition

So, a creditor needs to be included. What are the options? The good news is that this can be resolved easily.

Unsecured creditors, such as credit cards and personal loans, belong to Schedule F, Official Bankruptcy Form 106E/F (Schedule E/F: Creditors With Unsecured Claims (individuals).

Suppose you haven’t attended yet the 341 meeting of creditors. Then, all that needs to be amended is Schedule F. Note that there are local coversheet forms, so review your district’s bankruptcy court website to use the correct form.

The bankruptcy clerk requires additional costs to amend creditors. It’s approximately $30, which is worth it when considering the debt amount.

What if the 341 meeting was concluded, and the bankruptcy judge signed the Order of Discharge? Is it too late? Yes and no. This depends on whether the bankruptcy filing was a no-asset case, meaning there were no assets to distribute.

• What Happens at the 341 Meeting of Creditors? Here’s What You Need to Know

For example, the bankruptcy trustee had no nonexempt assets to pursue and sell. If that’s the case, then there’s nothing to do. Bankruptcy judges long ago ruled that there’s no point in reopening a case to add a creditor when there are no funds to distribute.

Now, if there were assets to distribute, then additional steps are required. In that case, the creditor should have collected funds on the outstanding debt. So the debtor could proceed to collect the debt.

Now, the bankruptcy case has to be reopened. This requires filing a motion and scheduling a hearing before the bankruptcy judge.

From a financial perspective, do the math. If the debt amount is minimal, how much will it cost to hire a bankruptcy lawyer to file the motion to reopen the case? The closer those two figures are, the more likely it is not worth it.

I always try to tell people that law is a business for the lawyer and the client. This means don’t spend $2.00 to get $1.00 back. That’s bad business for you —great business for the lawyer who just got paid. But the results should be good business on both ends. So, it must make sense financially.

So, I hope this helps you better understand the process in case you need to add a creditor to the bankruptcy petition.

Colleges and universities can purchase my bankruptcy law textbook directly from Routledge Publishing. For paralegals and students buying single copies, you can do so via Amazon books. To access my YouTube channel, click this link.

Additional blog content is available below:

• Bankruptcy
• Your Wallet

Please note that the information on this website should be used for educational and informational purposes only and does not constitute legal advice.

This podcast was transcribed and edited by Alex Hernandez for clarity.

Updated on March 2, 2025.