topic Re: Would you ever choose not to list a debt with Ch 7? in Bankruptcy

Would you ever choose not to list a debt with Ch 7?

Anonymous — Mon, 24 Aug 2015 20:39:58 GMT

Hello all,

I"m considering filing ch 7. I started a small business 3 years ago, and there is a lot of CC debt with it. Unfortunately, I cannot just file for the small business, so I need to file for personal. I figured if I'm going to file for personal ch 7, I might as well throw all my CC in it.

I currently have an interest free loan through a local credit union. It was interest free because it was for winterization of my home (which in turn caused a house fire, but that's a whole other story!). I'm considering not listing it. I can't fully explain why I don't want to list it - I figure it's interest free, it's approx $1100 at this point, and the monthly payments are affordable. It's different from the CC debt, which just keep charging crazy interest.

Am I silly for considering not listing it?

Re: Would you ever choose not to list a debt with Ch 7?

TRC_WA — Mon, 24 Aug 2015 21:26:49 GMT

By law it has to be listed.

Re: Would you ever choose not to list a debt with Ch 7?

StartingOver10 — Mon, 24 Aug 2015 23:17:50 GMT

TRC_WA is right. You have to list all the debt and your assets.

However, you are perfectly free to pay off any debt you like on a voluntary basis after your discharge. This way you satisfy your legal obligations by listing all the debt and your assets plus you satisfy the debt voluntarily after discharge.

Re: Would you ever choose not to list a debt with Ch 7?

bstone — Tue, 25 Aug 2015 14:31:25 GMT

As has already been said, it's against federal BK laws to omit any debt, even if to a private person.

You also can't pay more than $600 (I believe) to any one creditor in the three months prior to filing, this is considered preferential treatment and the trustee can force the creditor to give that money back and disburse it to your other creditors. Not really your problem unless it was to a friend or family member...

If you're trying to retain a positive relationship with this CU there are a couple of options:

1) File Ch 13 and pay all or part of your debts back over five years (but this will be all of your debts, not just this one);

2) Voluntarily pay the CU back after the discharge and then ask for forgiveness (before I paid it back I'd ask them if it matters, you may be blacklisted forever just for filing on them even if you pay it back);

3) See if you can reaffirm the debt. (I don't know if this is even possible with an unsecured loan, and quite honestly I'm not sure why you'd want to, but it may be an option.)

Re: Would you ever choose not to list a debt with Ch 7?

ezdriver — Tue, 25 Aug 2015 20:25:21 GMT

@Anonymous wrote:
Hello all,
I"m considering filing ch 7. I started a small business 3 years ago, and there is a lot of CC debt with it. Unfortunately, I cannot just file for the small business, so I need to file for personal. I figured if I'm going to file for personal ch 7, I might as well throw all my CC in it.
I currently have an interest free loan through a local credit union. It was interest free because it was for winterization of my home (which in turn caused a house fire, but that's a whole other story!). I'm considering not listing it. I can't fully explain why I don't want to list it - I figure it's interest free, it's approx $1100 at this point, and the monthly payments are affordable. It's different from the CC debt, which just keep charging crazy interest.
Am I silly for considering not listing it?

I filed ch7 bankruptcy because of large debt for my busines that were personally guaranteed. This si common with smal business owners. I did exactly what you are contemplating and yes, you have to list ALL of your debt. Is the interest-free loan secured by your home or is it an unsecured loan? Best advice I can offer is to consult with an experienced bankruptcy attorney and follow their guidance.