Deciding Which Debts to List in Bankruptcy

debts to list in bankruptcy

debts to list in bankruptcyDeciding which debts to list in Bankruptcy is not hard to do. The reason is simple.  Deciding which debts to list in Bankruptcy is a decision that is NOT left up to you. You are required to list ALL your debts. There is no picking and choosing. It is a legal requirement. I have been a Los Angeles bankruptcy lawyer for 34 years. My law firm and I have helped about 30,000 people. Believe me. I know there are lots of reasons why people think it would be best to leave something off your bankruptcy list. But it isn’t your choice to make. The law requires that you list EVERYBODY you owe.

Deciding which debts to list in Bankruptcy has been taken out of your hands.

You bankruptcy papers require you to provide a listing of all debts. It is not a WISH LIST of debts you want to get rid of. It is a financial statement. As a financial statement, the law requires that it be honest, and accurate. The legal system puts a lot of reliance on your bankruptcy schedules. Your bankruptcy schedules will help the court to determine if your bankruptcy case is going to be granted, or denied.

Prospective clients often fight over this with their lawyers. We know you have good reasons and the best of intentions for leaving certain debts out of your petition.

Lawyers hear all the excuses. Here is a rundown of the most common reasons we hear, (my appologies, Aunt Matilda):

debts to list in bankruptcy

If I list the money I owe Aunt Matilda, it will hurt her feelings. 

Wrong. You don’t want to list Aunt Matilda because it will embarrass you. If you really care how she feels, you would already have paid her. Lawyers are human. We know what you really meant. It makes sense. Nobody likes being embarrassed. But you still need to list her. Here is how you might handle things. Just let the person know you are going to file. You can tell that person that you have had money problems. I think they already know that.  The law allows you to repay any debts you wish to pay AFTER bankruptcy. This is really important, for good reason. The law requires you to file honest, accurate schedules. If you leave Aunt Matilda off the list, you might jeopardize the whole bankruptcy case.

debts to list in bankruptcyI’m going to pay her back anyway, so I shouldn’t have to list her. 

Wrong. If Aunt Matilda was so important, you would have already paid her back. In fact, Aunt Matilda might sue you to get her money back. Family members often sue each other. I talk to people all the time who intentionally left a debt out of their bankruptcy. They call me for help after they get sued for it. They would gladly have listed it, if only they could have foreseen what was going to happen.


debts to list in bankruptcyI can’t list Doctor Bones. He has been my family doctor for years.

Do you owe money to a doctor, but you still want to pay it? Again, if it was so important, why haven’t you already done it?  If you are never able to pay, at least you know you are protected by listing it. If you are able to pay later on, do so if you want to. Doctor-patient relationships can be very important. Especially if it concerns the treatment of a serious illness. If that is the case, have a heart to heart talk with your doctor. I guarantee that your doctor already knows that you owe him money. If the old bill is going to be a barrier to further treatment, then you already have the problem, don’t you? In that case, leaving it off your bankruptcy list will not help you. But it will hurt you, plenty. You might get sued, or have the debt appear on your credit.

debts to list in bankruptcyI don’t want to list my XYZ Bank credit card debt. I want to keep it for emergencies. 

The XYZ Bank will receive immediate, automatic notice of your bankruptcy filing. You live in the computer age. Today, financial institutions get automatic notices, based on your name and Social Security number. Your credit card account will be closed, whether you listed them or not. You can also expect that your bankruptcy hearing will be continued. That means taking more time off from work to go again. The bankruptcy trustee will require you to file and serve amended bankruptcy papers to list the debt. Your lawyer will probably charge you a fee to make the amendment. The court will charge you a filing fee for it. And, your lawyer may charge you another appearance fee for ytour continued hearing.


It’s not up to you to decide what debts to list in bankruptcy.