Do I Have to File Bankruptcy on All the Accounts I Owe, or Can I Keep Some?

By Cara O'Neill, Attorney
Learn why you must list everyone you owe money to in your bankruptcy papers.

It’s common to want to retain a credit account—such as a major credit card used for business travel or a pet insurance card that covers veterinarian bills—when filing for bankruptcy. The reason that you might want to omit a debt doesn’t matter, however, because the rule is clear—you must list all creditors that you owe money to in your bankruptcy petition, without exception. In fact, if you fail to list a creditor, the court might not discharge (wipe out) the debt in your bankruptcy. You’ll likely remain responsible for paying the debt after your case is over.

It might help to understand that bankruptcy does more than give filers a fresh financial start. Bankruptcy serves an additional purpose, as well. Specifically, it protects the rights of creditors by ensuring that all creditors receive an appropriate distribution of any funds available to pay the filer’s debt.

For instance, suppose that a filer is in a Chapter 7 bankruptcy, and the bankruptcy trustee (the court-appointed individual tasked with overseeing the case) finds nonexempt property (property that the filer cannot keep under state exemption laws) worth $3,000. It’s the trustee’s job to sell the property for the benefit of the creditors. The trustee will review the list of creditors reported on official Schedule E/F: Creditors Who Have Unsecured Claims and disperse the funds accordingly. If you omit a creditor, the creditor won’t receive a share of the funds that it would otherwise be entitled to receive.

Additionally, some filers might be tempted to leave off a creditor that the filer defrauded in some way. Regardless of the reason for the omission, understand that the bankruptcy process looks at your entire financial situation—not just a problematic portion you’d like the court to resolve.

Go to the main bankruptcy FAQ page.

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