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UNLISTED DEBTS - OMITTED DEBTS BANKRUPTCY DISCHARGEABILITY

The Beezley Case

by Matthew B. Tozer

 Under the current law, in the 9th Federal Circuit (which includes California and several other states), if:

1. You (the Debtor) file a Chapter 7 bankruptcy; and

2.  No assets are liquidated and sold by the bankruptcy trustee; and

3.  You receive your discharge

then, the debt that was not identified (or listed) is also discharged (forgiven, wiped out completely) if it is an otherwise dischargeable type of debt.

The two main Ninth Circuit cases on describing this rule are In re Neilsen, 383 F.2d 922 (9th Cir. 2004) and the famous In re Beezley, 994 F.2d 1433 (9th Cir. 1993).

But, if the unlisted creditor in question has grounds to object to the discharge of the debt (example - if the debt was fraudulently incurred), then the unlisted creditor can ask the court to reopen the Chapter 7 case, and litigate their nondischargeability claim, but only if they received no notice or actual knowledge of the original bankruptcy to have timely filed a claim.


Copyright 2012

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Under the new bankruptcy laws, Matthew Tozer is a debt relief agency because he helps people file for bankruptcy relief under the Bankruptcy Code.

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