Q:  Must I list all my creditors and all my liabilities on the bankruptcy petition?

A:  Yes.  According to Section 521 of the Bankruptcy Code, debtors must disclose all liabilities as of the date of the filing.   I reiterate that only liabilities have to be disclosed.  If you are not carrying a balance with a particular credit card company or creditor, you do not have a liability.  If your balance is zero with a lender, then a liability does not exist.   You are not required to list an account with a zero balance. 

However, I often recommend listing zero-balance creditors anyway.  Some reasons to list everything include:

• Peace of mind.
• Debt that is not listed is not discharged in the bankruptcy. 
• Creditors make mistakes and/or may charge erroneous fees to your account.
• Credit reports are often inaccurate.
• Reporting cycles vary among creditors so credit reports are not necessarily up-to-date.
• Possibility of identity theft.
• Creditors will close the account anyway upon receiving notice of the bankruptcy filing.

Q:  I have had my Chevron gas card forever.  I want to keep it.  Do I have to list this account in my bankruptcy petition?

A.  Maybe, but it depends on whether you have a balance on the account.  If you owe the creditor even $1.00, you have a liability.  According to the Bankruptcy Code, you are required to list the debt on your gas card. 

Many debtors think that if they do not list the creditor, they will be able to continue using the credit card or account since the creditor will not find out about the bankruptcy.  The problem, however, is that creditors have ways of learning about a bankruptcy filing.  For instance, creditors periodically review a debtor's credit report to check the debtor's creditworthiness and verify the debtor's goodstanding with other creditors. 

Upon learning of the individual's bankruptcy filing, a creditor is more likely than not to close the account and revoke all privileges.  There are two reasons creditors do this.  First, creditors can then force debtors to reapply for credit on less favorable terms -- the bankruptcy filing will be used against the debtor in the form of a higher interest rate, annual fee, and/or transaction fees.  Second, creditors are limiting their exposure to identity theft.  Because documents filed with the bankruptcy court are available to the public, creditors realize that the wealth of information contained in the bankruptcy schedules could be used by unscrupulous people to secure new credit or to use existing credit.  Therefore, creditors can be said to be looking out for themselves but debtors also benefit in a way from this preventative approach. 

One final note though, debtors may voluntarily repay any creditor after the bankruptcy proceeding.  Lengthly repayment agreements, however, are only enforceable if approved by the bankruptcy court.  So for debtors that want to keep a particular account, it may be possible to use the debtor's willingness to repay the existing debt as leverage against the creditor to keep the account open.  Of course, the creditor has sole discretion whether to close the account or continue to extend credit to the debtor. 

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