If a recorded judgment against a debtor is listed incorrectly is it exempt from that bankruptcy proceeding?

Answer:

Answer

There's lots of details that can change how that situation comes out, such as the nature of the judgment and which chapter of bankruptcy was filed. But, generally speaking, the Bankruptcy Code says that the debt is discharged if it is properly listed OR if the creditor had notice or actual knowledge of the bankruptcy filing in time to act to protect their rights. In 11 U.S.C. 523, the Bankruptcy Code says "(a) A discharge under section 727, 1141, 1228 (a), 1228 (b), or 1328 (b) of this title does not discharge an individual debtor from any debt— (3) neither listed nor scheduled under section 521 (1) of this title, with the name, if known to the debtor, of the creditor to whom such debt is owed, in time to permit— (A) if such debt is not of a kind specified in paragraph (2), (4), or (6) of this subsection, timely filing of a proof of claim, unless such creditor had notice or actual knowledge of the case in time for such timely filing; or (B) if such debt is of a kind specified in paragraph (2), (4), or (6) of this subsection, timely filing of a proof of claim and timely request for a determination of dischargeability of such debt under one of such paragraphs, unless such creditor had notice or actual knowledge of the case in time for such timely filing and request;" So, even if the judgment is incorrectly listed, if the creditor had notice or actual knowledge of the bankruptcy in time to act before the bankruptcy case was over, then the judgment is probably still discharged. There is also case law that says that a debt which was inadvertently not listed or incorrectly listed in a Chapter 7 "No Asset" case is still discharged if it would have been discharged had it been listed (though not all Courts subscribe to this view). However, it is my understanding that an unlisted debt in a Chapter 13 is not discharged since that creditor didn't have the opportunity to file a Proof of Claim and get some of their money back. In Chapter 7 cases, debtors who miss a creditor may also file a motion to reopen their case and add creditors they missed or listed incorrectly so long as those debts were incurred before the bankruptcy case wad filed and still get those debts wiped out. The Bankruptcy Court charges (as of 2/11/05) $155.00 to reopen a case and $26.00 to add creditors, plus there's usually additional attorneys fees to do this. Please note that nothing in this posting or in any other posting constitutes legal advice; this is simply my understanding of the facts, which I do not warrant, and I am not suggesting any course of action or inaction to any person.

First answer by ID0000000000. Last edit by ID0000000000. Question popularity: 190 [recommend question].