Can we be sued even though we filed for bankruptcy? 19 Answers as of February 21, 2011

I filed chapter 7 in 2008. When filing we forgot to add a creditor in the bankruptcy. Can he sue us now for the debt?

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William C. Gosnell, Attorney at Law
William C. Gosnell, Attorney at Law | William C. Gosnell
Yes, you can.
Answer Applies to: Tennessee
Replied: 2/21/2011
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
Get to a lawyer ASAP. If a lawsuit has been filed you should not delay in taking care of it. Once your default has been entered it will be very difficult and expensive to set it aside.
Answer Applies to: California
Replied: 2/21/2011
Goodman, Dicus, and Teinert, LLP
Goodman, Dicus, and Teinert, LLP | Scott W. Dicus
This actually depends on the facts of your particular bankruptcy. If the creditor had actual knowledge of your bankruptcy, then it's the same as if the creditor were actually listed in your papers. However, if the creditor didn't have actual knowledge, or, more commonly, you lost track of one or more creditors and had no way to identify them in your bankruptcy schedule, the chances are still good that the debt will be considered discharged. If yours was a no asset case (that is, all your property was exempt), the debt is considered discharged unless, by being left out, your creditor lost the opportunity to contest the discharge on the ground that the debt was caused by your fraudulent or embezzling behavior, or by a willful and malicious act. It is often possible to reopen the bankruptcy and let the bankruptcy judge rule on whether the deb is, in fact, dischargeable. If the creditor sues you in state court for a judgment, you could argue the issue in that forum or have the case removed to bankruptcy court.

If yours was an asset case-that is, at some point in your case, your unsecured creditors received some property from your bankruptcy estate-your situation is more difficult. Your nonexempt assets were already distributed to your other unsecured creditors, so the omitted creditor would be unfairly discriminated against if the debt were discharged. If the debt is a large one, you might want to hire a lawyer to reopen the case and argue that the debt should be discharged due to your particular circumstances.
Answer Applies to: California
Replied: 2/18/2011
Rhonda R. Werner Schultz, PL
Rhonda R. Werner Schultz, PL | Rhonda R. Werner Schultz
If you forgot the creditor, then you can be sued by that creditor as the debt was not discharged by the court.
Answer Applies to: Wisconsin
Replied: 2/18/2011
Law Office of Larry Webb
Law Office of Larry Webb | Larry Webb
Generally no. The procedure for dealing with a creditor who was inadvertently left off the schedules varies in different venues. Consult with a local attorney.
Answer Applies to: California
Replied: 2/18/2011
    Ursula G. Barrios Law
    Ursula G. Barrios Law | Guillermo Machado
    The creditor can sue you, but that debt (if incurred prior to your BK filing) is included in that BK, so the lawsuit would have little effect in the end. Simply send a copy of your notice of filing and discharge to the creditor and that should suffice.
    Answer Applies to: California
    Replied: 2/18/2011
    Cohen & Kendziorra, P.A.
    Cohen & Kendziorra, P.A. | Robert S. Cohen
    Yes, if the creditor was not included, then the debt was not discharged. Contact your original bankruptcy attorney and have him or her file a motion to reopen your bankruptcy case so you can file an amendment to add an additional creditor to your bankruptcy. There may be a charge to do so and you have to keep in mind the amount of the debt versus the amount your attorney may charge to do the amendment.
    Answer Applies to: Florida
    Replied: 2/18/2011
    Judith A. Runyon, Esq. Attorney at Law
    Judith A. Runyon, Esq. Attorney at Law | Judith A. Runyon
    If it was an unsecured debt then no - just provide them with a copy of your bankruptcy Discharge. If it was a secured debt then you have to reopen your bankruptcy case to add them in order for them to be given notice. You need to contact a bankruptcy attorney to discuss they further.
    Answer Applies to: California
    Replied: 2/18/2011
    Carballo Law Offices
    Carballo Law Offices | Tony E. Carballo
    You can be sued but the debt would have been discharged even if no notice was given if: 1. it was a Chapter 7; 2. There were no assets for the trustee to distribute (a no asset case); 3. The particular debt on which you are being sued was dischargeable; and 4. there was no specific determination by the court in an adversary proceeding that the debt was not dischargeable.

    You can defend the suit in the California court on the basis that you do not owe anything because of the bankruptcy discharge or reopen the bankruptcy case and bring an action for a determination that the debt was discharged, an injunction to halt the California lawsuit and for santions due to a violation of the discharge injunction. However, the first thing is to send a certified letter to the attorney representing the party suing you telling him/her that the debt was discharged (if that is the case based on what I stated above) and demanding immediate dismissal of the lawsuit. You must warn the attorney of possible sanctions by the bankruptcy court if he/she does not dismiss the case within ten days because of the violation of the permanent discharge injunction.

    If this sounds complicated or confusing, then you have proof that you need a lawyer to handle all this for you and you need one fast. This is indeed complicated even for lawyers who are not experienced in bankruptcy law and civil litigation at the same time.

    There is only a 30-day period to answer the lawsuit after being served with the summons and complaint. You must avoid having a judgment by default entered against you by the California court for failure to answer the lawsuit if you can not get the party suing you to dismiss the case right away. All this because you did not include all the creditors in your bankruptcy petition as required and provided them notice!
    Answer Applies to: California
    Replied: 2/18/2011
    Tilem & Campbell, PC
    Tilem & Campbell, PC | Peter Tilem
    Yes. You can be sued.
    Answer Applies to: New York
    Replied: 2/18/2011
    DiManna Law Office, LLC.
    DiManna Law Office, LLC. | Dawn DiManna
    Yes since you omitted the creditor from the Bankruptcy and the creditor had no notice, it was not included or discharged.
    Answer Applies to: New Hampshire
    Replied: 2/18/2011
    The Law Office of Mark J. Markus
    The Law Office of Mark J. Markus | Mark Markus
    Anybody can sue anyone for anything. I believe the question you want to ask is whether or not the debt was discharged. The answer to that depends on where your case was filed and whether it was a "no-asset" chapter 7 case (where no assets are liquidated by the Trustee). In the 9th Circuit (which includes California, Oregon, Nevada, Arizona, Hawaii) in a No-Asset chapter 7 case you are discharged from all dischargeable debts regardless of whether they were listed.
    Answer Applies to: California
    Replied: 2/17/2011
    The Shakoori Law Group
    The Shakoori Law Group | Rachelle Shakoori
    Depends whether the debt was from prior to bankruptcy and whether the creditor had some kind of notice of your bk filing. Also there was a case law that stated that in no asset chapter 7 cases the creditor that was inadvertently excluded may be discharged.

    You should consult an attorney in your state.
    Answer Applies to: California
    Replied: 2/17/2011
    Ferguson & Ferguson
    Ferguson & Ferguson | Randy W. Ferguson
    Yes, if they were not included in the bankruptcy.
    Answer Applies to: Alabama
    Replied: 2/17/2011
    Law Office of L. Paul Zahn
    Law Office of L. Paul Zahn | Paul Zahn
    If a debt was not listed in your petition and was not discharged in bankruptcy, then it remains a valid debt that may be collected.
    Answer Applies to: California
    Replied: 2/17/2011
    Diefer Law Group, P.C.
    Diefer Law Group, P.C. | Abel Fernandez
    You have to give the creditor notice that you filed. You should not have to re-open your case but that might be an option.

    Normally, you can just send the creditor a copy of the discharge and the creditor stops all collection efforts.
    Answer Applies to: California
    Replied: 2/17/2011
    The Orantes Law Firm
    The Orantes Law Firm | Giovanni Orantes
    It depends. Were any assets distributed to creditors in your case? If not, there is a case that says that particular debt is discharged anyway and the creditor bound by the discharge injunction that accompanies every discharge. However, because human imagination is boundless and other doctrines can often be called up by attorneys for the situation at hand, if the amount is significant, the safest approach is to reopen the case and add the creditor.
    Answer Applies to: California
    Replied: 2/17/2011
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