Last updated: October 23rd, 2020
Reading time: 4 minutes
One breath summary: You are obligated to list all of your creditors and debts. Intentionally omitting creditors and debts can have serious implications in your case. You may be refused discharge of your debts, or worse, charged with perjury.
- You may also be interested in our article on what happens if you accidentally omit a debt or creditors from your bankruptcy paperwork.
In many cases, people who are filing for bankruptcy protection do not want to include certain debts in their bankruptcy. Often, the debt is owed to a family member or a friend, or to a local business that that the person feels morally or socially obligated to repay. In other situations, the debt is has a lien attached to collateral that the person wants to keep, like a car loan attached to their car or a mortgage attached to their house.
Unfortunately, you cannot pick and choose which debts are included in your bankruptcy filing. Bankruptcy rules require that you include all of your creditors in your bankruptcy, even debts owed to friends, to relatives, and to creditors that you intend to pay in the future.
There can be penalties for intentionally failing to list a particular debt or creditor. For example, the Bankruptcy Court may refuse to discharge your debts. Also, all of the paperwork you file in your bankruptcy case is considered a sworn statement, under the penalties of perjury; if you intentionally file bankruptcy paperwork that you know is inaccurate, you may be committing perjury, which is a felony. As a result, it is critical that you be sure that you list all of your debts in your bankruptcy paperwork.
Keep in mind that while you are required to include all of your debts in your bankruptcy, the effect on those debts by the bankruptcy is a different matter. Some debts cannot be discharged by law. And in other cases, you can choose to continue paying on a discharged debt after the bankruptcy is over. That may involve a provision of your bankruptcy reorganization plan in Chapter 11, 12 or 13, or a process called a reaffirmation agreement in Chapter 7. Even if there is not a formal requirement for you to continue to make payments, you may be able to make voluntarily payments to the creditors anyway.
A bankruptcy discharge eliminates your legal obligation to repay a debt, in the sense that the creditor may no longer try to collect from you; however, the bankruptcy discharge does not eliminate your right to voluntarily repay a debt once the bankruptcy is over, if you choose to do so.
Get in touch with an experienced attorney to help guide you through the process of bankruptcy.