If you are filing for bankruptcy in Minnesota, one of the biggest mistakes you can make is forgetting to list one of your debts or intentionally hiding it. If you don’t list a debt, you can’t get rid of that debt in bankruptcy.
This point was recently emphasized on a bankruptcy case in the 7th Circuit United States Court of Appeals. In the case of In re: Smith, No. 08-3358 (9/23/09). The court agreed with the previous court that two lawsuits against a person who filed for bankruptcy could continue because the person failed to list those debts (the debts that resulted in the lawsuits) on Schedule F of their bankruptcy petition.
In this case, the person filing for bankruptcy didn’t list the debt, so the creditors (the people who were owed money) did not know about the bankruptcy until the person filing for bankruptcy tried to transfer the case to the state court bankruptcy calendar. The normal deadlines had passed, but the court still let the creditors have their say because they were never properly notified about the bankruptcy.
The general rule is that if you fail to list a debt when filing for bankruptcy, that debt will not be discharged by your bankruptcy. When the bankruptcy is over, you will still owe the debt that was not disclosed.
This probably is common sense; the Minnesota bankruptcy court can only free you of the debts that you list for the Minnesota bankruptcy court.
Some people don’t want certain debts known. The debts may be embarrassing or might have other complex problems associated with them. Whatever the case, your best resort is to disclose everything to your Minnesota bankruptcy attorney so the attorney can advise you on what is best for your situation.