While a new client may seek out a bankruptcy lawyer when they are served with a lawsuit, they may overlook the plaintiff in that very suit when listing their creditors.
Pretty amazing, but if you rely on the client to identify their creditors, their list will often omit creditors who didn’t send them a bill this month. Or creditors they want to continue paying. Or people they don’t want to know about the bankruptcy.
Creditors without notice of the debtor’s bankruptcy case may not be discharged (§523(a)(3)), so it behooves the bankruptcy lawyer to ferret out the balance of the creditors.
Where do you find the non obvious creditors?
- Guarantees of debts of others: kids, partners, businesses
- Hold harmless or indemnity clauses in marital settlement agreements
- Parties to accidents or other incidents involving the client
- Credit reports
- Marital settlement agreements
- Claims against the debtor’s corporate business
- Leases for business premises or equipment
The better your understanding of the debtor’s financial life, the more likely it is that you can fill in the gaps in the list of creditors and get your client the most debt relief possible.