By James Jennings
It happens. No matter how careful you are. No matter how much you planned and researched you made a mistake or you omitted something when preparing your bankruptcy documents. So now what?
The most common mistake I see is my clients don’t include all of their creditors. I must ask what seems like a hundred times when I meet with a client, “Is this everyone? Is there anyone else you owe? Do you want to go home and think about it some more? Do you need more time to go through your records?”
The answer more times than not is, “No, James there are no more. That’s everyone.”
No matter how much prodding and goading I do to get people to double check or even triple check, there are those few souls that come back after the documents have been prepared, reviewed, signed, and filed say to me, “Oh shoot, I found another creditor. Now what do I do?”
Since you can only file a Chapter 7 Bankruptcy every eight years you really only have two options in most cases; 1) you can live with your mistake. Meaning you are still responsible for that debt and will have to pay that creditor, or 2) You can amend your documents and add that creditor to the bankruptcy.
So let’s talk about number 2; amending your documents. How exactly do you go about doing that?
The first thing you have to do is find the necessary forms to amend your documents. The US Bankruptcy Court for the Arizona District has a great website that has all the forms you would ever need on it.
Next you need to follow the correct procedure. Amending bankruptcy documents in Arizona is governed by Local Rule 1009-1.
This means that after you prepare the necessary forms to reflect either updated information, or additional creditors, you will have to file them with the Court and pay the filing fee.
At the time of the this post, the filing fee in Arizona to file amended documents is $30. A current and up to date filing fee schedule can be found on the Court’s website.
The next step according to Local Rule 1009-1(a) is you have to notify everyone this change would effect. For example you would notify the Trustee, the United States Trustee and any new creditors you add to the case. You also have to provide them with a copy of any amendment to the petition, schedules, or statements you modified. This is typically done through the Court’s internal system and through the mail.
This is an important step because you do not want to circumvent your creditors rights. Also, by not notifying the creditors you harm yourself as well.
So this plays into Local Rule 1009-1(b). Which states in part:
“If an amendment to the schedules adds one or more creditors, the debtor shall file with the amendment a supplemental master mailing list that lists the names and addresses of those creditors added by the amendment. …”
This means you have to file a Supplemental Master Mailing List that has the additional creditors added to it. (The Master Mailing List is used by the Court to make labels for envelops containing a notice from the Court informing your creditors that you filed for bankruptcy.)
The requirements for the Master Mailing List for Arizona can be found on the Court’s website.
The notification to your creditors does two things:
- The notice of the bankruptcy sent by the court clerk tells your creditor where to file a proof of claim and the deadline for doing so; and
- That the creditor must cease any collection action, including telephone calls, billing or law suits that might be pending against the debtor. The automatic stay protects the debtor and his property from all forms of collection during the bankruptcy.
We are all guilty of errors or omissions in life. After all, we are human. Follow the court’s rules and procedures when making your modifications and everything will work out.
In most cases if you have any questions about the process the clerk of the court will be happy to assist you in finding the answers.
If you have any questions regarding a specific legal matter or legal strategy you should contact an attorney for legal advice. If you would like to get started on a family law or bankruptcy case call us today, 602-896-9020, email us at firstname.lastname@example.org, or visit our website at DiscountDivorcePro.com.