One of the most common questions asked by new bankruptcy clients is, “Can I leave a debt off my bankruptcy?” The answer is an unequivocal “no.” Every debt you owe at the time your bankruptcy is filed must be listed in your bankruptcy schedules. However, not every debt is discharged, nor is every debt forgotten.
While the federal bankruptcy laws require that the debtor list every debt, the law also allows the debtor to elect to reaffirm the debt, meaning that it survives the bankruptcy discharge. When the debtor and the creditor execute a reaffirmation agreement that is filed with the bankruptcy court, the debtor’s personal obligation to pay the debt continues after discharge. Reaffirmation agreements are common in auto loans and home mortgages. The debtor continues to pay the monthly payment despite the bankruptcy filing.
Discharged debts can be voluntarily paid. This is often the case when a discharged debt is owed to a family member, a family doctor, or to some other personal creditor. The Bankruptcy Code provides, “Nothing contained in. . . this section prevents a debtor from voluntarily repaying any debt.” 11 U.S.C. § 524(f). Voluntary payments do not do not invalidate the discharge order and do not create a new legal obligation. Creditors are still prohibited from taking any action to collect the debt, including sending a payment reminder. In this case “voluntary” means “free from creditor influence or inducement.”
Every debt must be listed in your bankruptcy, but not every debt is “erased.” Many debtors continue their monthly payments as originally agreed, even after filing bankruptcy. If you have a debt that you want to pay, speak with your bankruptcy attorney. Your attorney can advise you on the proper way to pay the debt and avoid complications in your case or other legal entanglements.