One key advantage of Chapter 7 bankruptcy over Chapter 13 is the discharge it offers. While it is possible to get some debts discharged in Chapter 13, you will not really know if this happens until you complete a three- or five-year plan. With Chapter 7, you will know right away what debts will be discharged and which ones will not. Because of the way this works, it is vital to list every debt you have when you fill out your paperwork.

Debts Cannot Receive a Discharge If They Are Not Listed

There is a ton of paperwork involved in a Chapter 7 bankruptcy case, but fortunately, your lawyer will complete it for you. He or she will rely on you supplying the information, though, and part of the information you must supply includes every debt you have. It is your responsibility to let your lawyer know about every debt you have, and there is a good reason for this. If you do not list a debt on your bankruptcy documents, it will not receive a discharge. A debt cannot be discharged if the court does not know it exists.

If you accidentally forget to list a debt, you might have a short amount of time after you file the documents to add it to them; however, it is so much easier to include the debts from the start than to have to worry about adding more later.

You Should List Debts Even if They Will Not Qualify for a Discharge

Secondly, it is important to list debts on your list even if they will not qualify for a discharge. There are some debts that almost always qualify for a discharge, and there are other debts that never do. There are also debts that may qualify for a discharge or may not qualify. If you list every debt you have, even the ones that might not qualify, you have a better chance of the court approving them for a discharge. If you fail to list them, there is no chance they would qualify.

You Should List Every Creditor, Collection Agency, and Debt

A third thing to understand is that you should list every creditor, collection agency, and debt, and there are several important things to know about this. First of all, your lawyer will look up your credit report and list every creditor that it contains; however, there might be creditors you owe money to that are not on this report. For example, you may have a debt that was turned over to a collection agency. The debt might be on your credit report showing you owe money to the original creditor, but it might not yet show that there is a collection agency involved. If the collection agency owns the debt and you fail to list the collection agency on your documents, it might not receive a discharge.

Because of this, you should take some time to dig through all the paperwork you have at home to look for any debt you might have, no matter how old it is. Your lawyer will recommend including every debt, even if there are some that are 50 years old or some that are questionable.

There Is a Chance You Could Receive a Discharge for a Debt Not Listed

If you go through the steps and still end up forgetting to include a debt, call your lawyer immediately. There is still a chance the court will approve a discharge for it, and it is worth asking about.

If you have questions about this branch of bankruptcy and how it works, you should talk to a bankruptcy law attorney like Charles J Schneider PC in your city. Many lawyers offer free evaluations, which offers a chance to meet with an attorney for free.