Believe it or not, it is not that easy to know exactly who you owe. If you are late paying credit card debts, the banks sell and re-sell your debt many times. You start to get letters from people you never heard of – people demanding money from you without even saying who originally “owned” the debt.
This problem is especially true with medical debts. After getting medical treatment, you receive bills from medical testing companies, nursing services, health insurance companies. Sometimes these bills come months or even years later. You can’t be sure if they had anything to do with your medical treatment.
This is not as big a problem as it sounds.
Our office obtains a credit report on all of our clients. This will supply us with the major creditors. It is true that credit reports sometimes don’t list all of the creditors. But, even this is not a real problem for the following reason.
All dischargeable debts owed to creditors are covered by bankruptcy if the case is approved – even if they are not listed on the bankruptcy petition. This is the rule for all Chapter 7 bankruptcies where the person has no assets – which is 99% of the cases our office files. This is true as long as the debt existed before the bankruptcy filing.
This has been the law since the late 1980’s. As Judge Plunkett said, in the case of In re Karras, 165 B.R. 636 (1994), “In a no asset case, the failure to list a debt does not transform a dischargeable liability into a nondischargeable one.” So, all the debts are discharged or eliminated even if you forget to list the debt.