Oh No! I Forgot To List That Debt In My Chapter 7 Case; Is It Still Discharged?

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Many people who seek and eventually file bankruptcy often have thought about filing long before they actually go through with it. Debts and creditor calls continue to pile on and they realize they have no other options. This delay can lead to some creditors being overlooked and not listed at all when their bankruptcy petition is filed. So is that debt that was not listed in my Chapter 7 bankruptcy still discharged when the case is over? The answer is more than likely, YES.

Confusion over the discharge status of unscheduled debts continues to give rise to lawsuits in the Bankruptcy courts. In no-asset cases, there is no deadline for filing proofs of claim so there is no prejudice to the holder of an unscheduled claim based on an inability to timely file a proof of claim, and the failure to schedule a creditor does not disrupt the bankruptcy’s administrative process. Robinson v. Mann, 339 F.2d 547 (5th Cir. 1964).

Essentially, a Chapter 7 discharge grants debtors a discharge of all of their debts – scheduled and unscheduled – unless excepted by Section 523. Section 523(a)(3) allows an exception to the discharge for unscheduled debts, but in the Fifth Circuit, the Robinson test is used to determine if this exception applies. The 11th Circuit (which includes Georgia) follows the Robinson test as well. In re Baitcher 781 F.2d 1529, 1534 (11th Cir. 1986).

Under this Robinson test, a debt in a no-asset case that is unscheduled due to inadvertence or negligence is not excepted from the discharge; rather the unscheduled debt is discharged along with the scheduled debts. The debt is only excepted from discharge if the debtor’s failure to schedule the debt was due to intentional design, fraud, or improper motive. Therefore, as long as you do not intentionally exclude a creditor from your bankruptcy for an improper reason, the debt will still be discharged in your bankruptcy.

Posted in Chapter 13 Bankruptcy