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No. As part of the bankruptcy process, filers must declare all debts. All debts are required to be included in the submitted paperwork, and all debts are considered as part of the overall bankruptcy agreement and plan. This requirement includes debts not eligible to be discharged, such as student loans, secured loans, condo/co-op housing fees, and debts arising out of tax-advantaged retirement plans. 
When submitting paperwork to file for bankruptcy, you are certifying that the information is complete and accurate, to the best of your knowledge. Failing to declare debts can be seen as an act of perjury, which can lead to criminal penalties. Further, the judge and trustees overseeing your case may take the failure to declare all debt as a sign of bad faith and can have your case summarily dismissed.
Overall, know that you are supposed to make a total, comprehensive assessment of your financial situation when filing for any type of bankruptcy. Omitting certain creditors is like trying to conceal assets “hidden” in an account to avoid having to liquidate them. Even if declaring the debt owed may seem insignificant to you, leaving out this information can have serious consequences for your bankruptcy case and for your overall financial future.
If you have questions or concerns about your financial situation or about bankruptcy, you can reach out to a bankruptcy lawyer in the Treasure Coast of Florida.
Every single amount of monies owed is supposed to be included in the paperwork for your bankruptcy filing. This applies whether you are seeking to file for Chapter 7, Chapter 13, or really any other form of bankruptcy.
Many individuals are surprised to find out that they are expected to include “informal” debts owed to family and friends on their bankruptcy filings. While certain agreements to borrow money may seem casual and based on the “honor system,” the reality is that these arrangements still affect your financial situation. Further, the goal of the bankruptcy process is to satisfy all creditors to the extent possible, so the U.S. Bankruptcy Courts expect the list of creditors to be comprehensive and include every single relevant debt.
Further, debts that aren’t really part of the overall bankruptcy agreement must still be considered. Alimony, child support, tax liens, restitution fees for crimes committed, and other types of debts are ineligible to be included in bankruptcy proceedings. Secured debts, including car loans and home mortgages, also should not be involved. Even still, these debts must be listed so that the court can obtain an overall picture of your financial situation.
The goal of bankruptcy is for the filer to lay all of their situations bare to the court and to their creditors. All of their debts and obligations are considered, including things like rent and living expenses. Also included are all of their current assets, investments, retirement accounts, life insurance policies, income, and other financial holdings.
By comparing the total amount of obligations to the total amount of holdings, the filer along with the court’s help can determine the best way to address the situation. In Chapter 7 bankruptcy, this means the filer will liquidate all non-exempt assets in order to pay off as much debt as possible while discharging the remainder. With Chapter 13 bankruptcy, the filer is expected to make monthly payments to each creditor, and the amount on these payments is set in part by comparing total obligations to total assets.
Omitting debts means that the court is not able to get the full picture needed, and it can affect your Chapter 7 or Chapter 13 plans. Also, if you omit debt, it will be ineligible for discharge, meaning that you can carry it with you even after completing a bankruptcy.
The easiest answer is to work out an agreement prior to filing. Many creditors will allow you to pay down part of the debt you owe and forgive the rest. Others may be willing to make some arrangements so that the debt is resolved.
The key is that all of these arrangements must be taken care of before filing. If the debt is resolved, it doesn’t have to be included.
Overall, though, know that you cannot pick and choose which creditors to choose once you file for bankruptcy. If someone is willing to agree to be left out of bankruptcy, they may be willing to agree to another arrangement, so talk to them and see if you can come to a workout agreement to have the debt resolved or forgiven in total.
Know, also, that if a creditor is aware of bankruptcy, that is supposed to be their opportunity to declare themselves as a creditor and be included in the final arrangement. If they were aware of your bankruptcy but didn’t petition the court to be included, it’s very likely that they will be legally unable to collect on that debt once the remainder has been discharged.
Bankruptcy can be confusing, and we can sometimes be forgetful about certain debts. Both of these challenges are why it can be beneficial to work with an experienced Florida bankruptcy lawyer who can help you with your case.
From filing paperwork to coming to a final agreement, having an attorney at your side allows you to be informed of your legal rights and options. It also provides you with an important resource to reduce the overall burden placed upon you during your case. Working with an attorney enables you to understand the ins and outs of a bankruptcy filing, and your attorney can even help you negotiate an agreement with certain creditors if you want to resolve their debts prior to filing.
Going through bankruptcy isn’t easy, but it is sometimes the best choice to make for your own financial future. If you aren’t sure about whether to file, or you have specific challenges you want to address, make an appointment to speak to an experienced bankruptcy attorney in your area today.
The attorneys at Hoskins, Turco, Lloyd & Lloyd have practiced bankruptcy law in Florida for over 20 years. We aim to give you peace of mind and help you navigate the process in order to achieve your specific goals.
Talk to a bankruptcy lawyer near you when you call (866) 460-1990 or contact us online to schedule your confidential, no-risk case review.
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