Bankruptcy

Not Huge and Very Stupid: A Discharge is Denied

By Bill McLeod, Esq.

I have been asked by clients if they can avoid having to list all of their credit cards on their bankruptcy schedules. The answer is simple: ?no.? However, they must list all of their debts. And if you owe the credit card company money, you must list it on your bankruptcy schedules (open lines of credit are not debts, although no debtor should expect that an inactive line of credit will survive a bankruptcy filing). Not doing so is ? legally speaking ? stupid. And recently, a debtor in Massachusetts learned just how stupid it really was.

The debtor filed a chapter 7 case. In an Adversary Proceeding, a creditor alleged that the debtor made a false oath when she failed to list five separate credit card debtors on her petition. She also did not bother to amend her schedules at any time?even after the Adversary Proceeding was filed. When asked about it, the debtor replied:

I didn?t list [the credit cards] because I didn?t want to totally destroy my credit. That?s basically ? I didn?t think I had to, you know, divulge these small little credit cards that didn?t mean anything. They weren?t huge.

Full post as published by McLeod Law Offices on April 29, 2008 (boomark / email).