Consumers quite often file a chapter 7 bankruptcy case and forget to list a creditor due to the fact that they are going through a very stressful period in their life and they are not thinking clearly. More often than not, there is a medical debt that had not been reported to the three major credit bureaus so there was no way the consumer could have known of the debt.
For anyone in this situation, I would advise you to Fugeddaboutit! (“forget about it”).
Why? Well, the issue has been addressed and resolved in JUDD v. WOLFE, No. 95-5141 (1996). The 3rd Circuit case holds that unsecured debt is discharged in a no asset chapter 7 to the extent it was a dischargeable debt.
Susan Judd attempted to reopen her chapter 7, no-asset case in order to add a creditor that was omitted from her bankruptcy schedules. The Court held that a motion to reopen is not necessary to discharge the debt if the statutory exceptions to discharge do not apply. The statutory exceptions are very limited and pertain to debts incurred by false pretenses, false representation, actual fraud or debts related to “willful and malicious injury.”
Basically, it is the idea of no harm, no foul. The debt would have been discharged in the chapter 7 case had it been listed, thus simply because it was not listed does not transform the debt into a non dischargeable debt.
The holding in this case keeps with the spirit and the letter of the law, affording consumers a fresh start, free from debt.