Bankruptcy Alphabet – A is for Amendment
I considered it very fitting to begin the bankruptcy alphabet with a word “Amendment” for the first letter of the alphabet. By amendment, I specifically mean amendment to creditor information. This topic is near and dear to my heart, and it underscores the importance of providing the correct and up to date creditor information to your bankruptcy attorney.
The correct creditor information is important for two reasons. First, it may affect dischargability of your debts. And second, it is costly and time consuming for your bankruptcy attorney to amend the creditor information after the original filing of the petition and schedules. But, most importantly, it translates into more money in attorneys’ fees and court costs for you to correct the information that you were required to provide to your attorney in the first place.
This is the reason why your bankruptcy attorney always asks for at least 2 statements from creditors, which you received during the last 90 days prior to the commencement of your case. This is not arbitrary — the notice provided to such creditors, in accordance with the information in such a statement, is presumed to be a good notice pursuant to Section 342 of the Bankruptcy Code. That section also instructs us that “[n]otice provided to a creditor by the debtor or the court […] shall not be effective notice until such notice is brought to the attention of such creditor”. It means that if a creditor is not notified in accordance with that Section 342 of the Bankruptcy Code, you risk that one of your debts may not be discharged. If possible, you should always locate and turn over any communication from the creditor received during the previous 90 days. If that is not available, you should call the creditor, and request a statement to ensure that you have the most current creditor information.
Once the Petition and the Schedules are filed, the only way to amend, and to add creditor information is through the lengthy amendment process. This process involves amending the bankruptcy schedules, filing Notice of Compliance with the Requirements for Amending Creditor Information, filing new Declaration Regarding Electronic Filing (one that you have previously signed under penalty of perjury), and serving all these amended documents on the affected creditors. In other words, it means your attorney, and/or his staff, will have to spend time preparing all these documents for filing. For you, it means that you will have to pay for your attorneys’ time to do the amendment, and the court’s fee for processing the amendment.