Bankruptcy cases can be amended to allow for additional debts
People who have decided to file bankruptcy often are confused about what debts can or cannot be included in their petition to the U.S. Bankruptcy Court.
People who have decided to file bankruptcy often are confused about what debts can or cannot be included in their petition to the U.S. Bankruptcy Court.
Sometimes debts are so numerous that one may be inadvertently left off the list of creditors whose bills have gone unpaid and need to be included in the bankruptcy filing. As long as the case hasn't been closed, and the timeframe during which claims may be filed hasn't expired, an individual can petition the court to amend their bankruptcy action to list additional creditors.
Under some circumstances, even if a case has been closed, the additional debt will be included. Those conditions include a closing in which no distribution has been made to creditors and the debt in question isn't nondischargeable, such as taxes, child support or student loans.
According to the Clagett Law Office, a West Virginia law firm, a bankruptcy can also be reopened, but that rarely happens.
"In certain instances a bankruptcy case can be reopened, but except to bring a contempt proceeding against a creditor ignoring the discharge injunction, it is a rare occurrence," the firm's website states. "Most courts have moved away from the practice of reopening cases to add creditors as the debt is generally discharged anyway."
Amending or reopening a bankruptcy case shouldn't be confused with reaffirming a debt. In that situation, the debtor has voluntarily agreed to pay a particular debt. For instance, the individual may want to keep a family car and make payments to the creditor by signing a new contract for the vehicle.
In some cases, a creditor may ask a debtor to pay a debt even if it is included in the bankruptcy. Usually this happens when a co-signer such as a family member or friend is involved and the debtor does not want that individual to be solely responsible for the remaining bill.
However, people who are filing for bankruptcy cannot choose which assets or debts they wish to have included in the court action. Every asset the individual owns must be included in the filing, although some may be exempt under the exemptions allowed by the federal court or by state regulations where the bankruptcy is being filed. In addition, debtors cannot make a preferential payment to one creditor shortly before bankruptcy is filed because the court considers that unfair to the other creditors.
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