Do I need to know exactly how much I owe to file for bankruptcy?
When you’re thinking about bankruptcy, it’s not unusual to be feeling overwhelmed. Some people stop opening their bills altogether, and it’s easy to lose track of who you owe, and how much.
Not knowing how much you owe won’t stop you from filing for bankruptcy
Once your bankruptcy case is filed, every single one of creditors listed is going to get a notice about it. This is good, because from that point forward they no longer can try to collect that debt. You’re protected during the bankruptcy and, if all goes according to plan, your debts will be discharged and no one will be able to collect on them again.
The petition does have a spot for listing how much money you owe each creditor, but it’s okay if you don’t have the exact amount. In a pinch, you can even list the amount as “unknown.” A few weeks after you file there will be a meeting of creditors, and if the number in the petition isn’t correct, that’s when the creditor can get it corrected. That’s not your responsibility.
Not knowing who you owe can cause problems
Even though you don’t need to know how much you owe to the penny, it’s important to know who you owe. If a creditor is not listed in your bankruptcy, you will still owe that money. That’s why a credit report is run for every client as part of the process, but not every debt is going to show up. Medical debt won’t appear on a credit report for a year, for example, and if you owe rent to a landlord it may not be reported to a credit agency at all.
When your bankruptcy petition is ready, go over it carefully to make sure no creditor was missed. It’s possible to add a missed creditor in later on, but that’s an expense you may be able to avoid by taking the time to compare your creditors to the list in the petition.
The biggest bankruptcy mistake is delaying
If you are worried about being able to pay all of your bills, please take advantage of a free consultation right away. Bankruptcy isn’t the best option for everyone, but if you miss an important deadline you may not have that option at all. Having all the information will just help you make the best decision.