Legal Question in Bankruptcy in California
discharged or not?
In 2000, I executed a personal guarantee for the benefit of a small corporation that I was involved with at the time. In 2005, the corporation stopped paying the bills. In 2006, I filed a personal, no asset Chapter 7 and it was granted. I failed to list the personal guarantee or make any reference to that debt/obligation on my BK petitions. Now, in 2007, the creditor is suing the corporation and me. Is there any chance that I successfully discharged the debt, even though I didn't list or reference that debt/obligation?
I suspect this might require a thorough analysis, so I'll be very glad to just get an answer that is qualified by ''probably'' or ''probably not'' or whatever indication you can give me on these facts.
Thank you for your time!!
2 Answers from Attorneys
Re: discharged or not?
The law is that if you have a no asset BK and you forget to list a debt, the debt is discharged as well. Send a formal pleading-style notice of discharge of debt to the new court and the creditor's attorney. Attach a copy of the notice of discharge. Also, talk to secure creditor's counsel's and try to secure agreement to dismiss you from the case.
Re: discharged or not?
I concur with Mr. Cohen's response. The 9th Circuit Court of Appeals has stated very clearly that failure to list a debt in a no-asset chapter 7 does not prevent a discharge of the debt. Any experienced bankruptcy attorney should be able to help you with this. If the creditor's attorney won't dismiss you from the case, then you can take legal action both the creditor and its attorney for violating the discharge order.
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