Do I have to list all my debts?
Yes, it is very important to list all of your debts in a bankruptcy. Here are some reasons why:
- Bankruptcy is a very powerful remedy, but the law which gives you protection also requires that all creditors be included. It’s a give and take.
- Since all creditors are subject to the Stay of Proceedings, leaving some creditors out of the process (whether relatives or “just one credit card”) is granting those creditors collection privileges that are not available to the others unless they obtain court approval (using credit during bankruptcy is generally not permitted).
- If you change your mind about that debt in the future, you may be liable to repay the entire amount.
- The purpose of bankruptcy is to obtain a fresh start. Unless all debts are included, a fresh start is much more difficult.
- Of course, if you feel that your circumstances warrant not including a particular debt, discuss this with your trustee. He or she will help find a solution to your dilemma.