March 3rd, 2010 by Reed Allmand 
In the bankruptcy case of Mammola, Robert J.; In re, 20 the bankruptcy debtor failed to list a creditor who later filed a lawsuit against the debtor. After attempting to reopen the bankruptcy case so that the omitted creditor could be included in the discharge, the bankruptcy court denied the debtor’s request.
The details of the bankruptcy case:
The debtor filed for Chapter 11 relief in 1990. In 1993, the case was converted to Chapter 7. The debtor received a discharge following conversion. The case was closed in 1999 after the trustee completed administering assets. Ten years later, the debtor asked the bankruptcy court to reopen the case to add an unscheduled creditor. The debtor said he did not learn of the creditor’s claim until 2005, when he was sued by the creditor. The creditor countered that the debtor did not inform him of the bankruptcy for two years, during which time the state court action was litigated up to the point of trial. Because the creditor’s claim arose before the debtor’s case was converted to Chapter 7, the claim would have been potentially dischargeable pursuant to Sections 348 and 727 if it had been scheduled at the time of conversion. However, because it was not listed, Section 523(a)(3) applied. In Colonial Surety Co. v. Weizman, 564 F.3d 526 (1st Cir. 2009), the 1st Circuit “interpreted Section 523(a)(3) to provide that the claims of omitted creditors without knowledge of the bankruptcy are not discharged even in cases where there are no assets available for distribution to creditors.”
This bankruptcy case perfectly illustrates why it is critical that debtors accurately list their creditors in their bankruptcy filing. Failing to properly file your creditors in your bankruptcy case can ruin your chances at a fresh financial start. In the case of the debtor in this Chapter 7 bankruptcy, his omission of a creditor created an opportunity for that creditor to access his future income and assets. If he had only taken the time and effort to collect all of the information on his debts at the time of filing bankruptcy, he could have avoided this disaster. Remember, when you are preparing to file bankruptcy, check all three credit reports, chex systems (for bounced checks) and even utility companies for past due bills. Also do not fail to include debts owed to family members and friends in your bankruptcy filing. Your fresh financial start is dependent on your due diligence.
About Reed Allmand
Allmand's vision is rooted in his own financially precarious childhood in Abilene "My father always had difficulty holding a job and supporting our family, so after my parents divorced when I was 12, my sister and I got jobs to help make ends meet," he recalls. "I remember what it felt like as a child to worry that our car would be repossessed or home foreclosed on."
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