Bankruptcy Guide‎ > ‎Debts‎ > ‎

Omitted Claims

Creditors' claims omitted from the bankruptcy schedules in an asset case may not be dischargeable.

Under section 523(a) of the Bankruptcy Code, certain debts are excepted from and not included in a bankruptcy discharge. This includes any claim that is not listed or scheduled by the debtor in time to permit the timely filing of a proof of claim, unless the “creditor had notice or actual knowledge of the case in time for such timely filing.” If a creditor does not know about the bankruptcy until after the deadline for creditors to file claims, the creditor cannot file a timely proof of claim. If the creditor does not know about the bankruptcy in time to file a timely proof of claim, the burden is on the debtor to file a timely proof of claim to avoid the exception of the omitted debt from discharge under 523(a)(3).

If the debtor's bankruptcy is a no-asset case, omitted claims usually are dischargeable.

In a no-asset chapter 7 case, all prepetition debts that are not of a kind specified in paragraph (2), (4), or (6) of § 523 are dischargeable regardless of whether they are listed in the debtor's bankruptcy schedules. 11 U.S.C. § 523(a)(3)(A).

Where the claims involved are not of a kind specified in paragraph § 523(a)(2), (4), or (6), a pre­petition creditor is only prejudiced by not being listed on a debtor's schedules and having no notice of the bankruptcy filing if there are assets to distribute and the creditor has been denied the opportunity to share in that distribution. Absent that prejudice, nondischargeability under § 523(a)(3)(A) is never triggered.

In re Dunhill, Case No. 11-12052-HRT (Bankr. D. Colo., July 11, 2012). See also In re Parker, 313 F.3d 1267 (10th Cir. 2002); In re Padilla, 84 B.R. 194, 196-197 (Bankr. D. Colo. 1987); In re Tyler, 139 B.R. 733 (D. Colo. 1992) [rationale behind Padilla and progeny is sound]; see also, Judd v. Wolfe, 78 F.3d 110 (3rd Cir. 1996), 193 B.R. [105]; Zirnhelt v. Madaj (In re Madaj), 149 F.3d 467 (6th Cir. 1998); In re Nielsen, 383 F.3d 922 (9th Cir. 2004).

If the debtor's bankruptcy is an asset case . . . 

A debtor should do the following:
  • Review the bankruptcy schedules and mailing matrix to make sure everyone is listed who has a claim against the debtor, even if disputed. 
  • Amend the schedules to add any omitted creditor and to provide notice of the bankruptcy and of the deadline to file a claim.
  • After the creditors' deadline to file a proof of claim, review the claims filed to determine whether claims should be filed by the debtor on behalf of any creditor who has not filed a claim.2  
  • Within thirty days after the creditors' deadline, file a proof of claim if not timely filed by a creditor whose debt is entitled to priority, such as taxes or domestic support obligations. 
If a creditor or the debtor does not file a proof of claim for a priority debt, the claim will not be paid anything by the bankruptcy trustee, and money will go to other priority claims or to general unsecured creditors instead. That will probably leave the debtor with a larger amount to pay on a non-dischargeable, priority claim after the bankruptcy is over.

A debtor's attorney can help the debtor, but the debtor must make sure that the attorney has all information necessary to assist in accomplishing the debtor's goal of a fresh start. 

¹ The 90-day deadline after the meeting of creditors does not apply to a governmental unit, which is allowed 180 days after the filing of the bankruptcy petition to file a proof of claim. Rule 3002(c)(1).

2 I email my clients copies of each proof of claim as it is filed for the client to review. The bankruptcy trustee should be notified if a debtor has any objection to the validity of a proof of claim filed in the case.

In an asset case, a creditor must file a proof of claim to be paid in the bankruptcy. A creditor who does not file a claim does not get paid, but the claim can be discharged if it is listed by the debtor in the debt schedules or if the creditor has notice of the bankruptcy and an opportunity to file a proof of claim before the deadline.