So, you slipped up and left a creditor out of your bankruptcy schedules. Can you add an omitted creditor after the fact?
In the fateful words of a careful lawyer, it depends.
Depends on when the amendment is made and what chapter you’ve filed. And the effect of adding a creditor varies.
Let’s walk through the legal thicket to add a creditor to your bankruptcy papers.
Amendment while case is open
At the most basic level, anytime the case is open in the bankruptcy court’s clerks office, you can file an amendment to your schedules.
Adding a name to the schedules gets the new name added to the master address list which parties use to give interested parties notice about the case.
Just because the filing is accepted doesn’t decide anything about the effect of the filing. But it’s universally true that the sooner an omitted creditor is added, the better for the debtor.
There’s a fee for amending the lists of creditors, currently $32.
Does adding a creditor give timely notice?
Getting a creditor on the mailing list doesn’t necessary get them actual and timely notice of the case.
The clerk’s office sends out the notice of the bankruptcy filing at the beginning of the case. The notice of the case sets out the deadlines for creditor action in the case:
- date of the first meeting of creditors
- last day to object to discharge or dischargeability
- bar date for filing proofs of claim
Unless the added creditor gets actual notice, just getting them in the bankruptcy papers may not be enough to bind that creditor to the deadlines in the case.
In my office, then, we amend the schedules, mail a copy of the notice of commencement of the case to the added creditor, and file a certificate of service showing that we gave the new creditor actual notice.
That way, there is no doubt that the creditor got notice.
When important deadlines have already passed
This is when the effect of adding a creditor gets dicey.
If the added creditor misses the first meeting of creditors, there are generally no adverse consequences.
Different story if the added creditor doesn’t get notice in time to challenge the discharge of that creditor’s debt. As we discussed in our post on Missing Creditors, if there will be a distribution to creditors in the case, a debt not listed survives the discharge.
Further if the added creditor has a claim that may be non dischargeable, the window for bringing an adversary to contest discharge remains open.
If the missed deadline is the deadline to file a proof of claim, often a late filed claim will be allowed on the grounds that the creditor didn’t get notice.
Chapter 13 is unforgiving
While the law makes varying accommodations for an omitted creditor in Chapter 7, the approach to the omitted creditor in Chapter 13 is more rigid.
Almost all courts hold that a creditor who doesn’t get notice of the filing of a Chapter 13 case in time to object to confirmation is not bound by the discharge. So, skipping a creditor in Chapter 13 stands to hurt the debtor’s fresh start by allowing the claim to survive
It’s worth a lot to get everyone affected by your bankruptcy case actual and timely notice of the case for the broadest possible discharge.