Bankruptcy FAQ for the Day

Question: On your Bankruptcy Petition, must you list creditors to whom you owe NO money (e.g. credit cards with a zero balance)

Answer: NO, Section 101(10) of the Bankruptcy Code defines a Creditor as "(A) Entity that has a claim against the debtor that arose at the time of or before the order for relief concerning the debtor..."

And, as I am sure your next question will be...

Section 101(5) defines a Claim as..."(A) right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured..."

Translation: A creditor, for BK purposes, is someone who "actually" can "claim" something is owed to them by the debtor at or before the time the bankruptcy petition is filed. Thus, a credit card with a ZERO balance at the time of filing has no claim against the debtor; hence, that credit card is not a creditor for BK purposes and need not be listed on your bankruptcy petition.

However, there can be dire consequences for intentionally omitting creditors to whom you owe money. Chase V. Harris, First Circuit.

Nevertheless, to be on the safe side, when your listing your creditors, you should list every conceivable creditor. Even if you have zero balance on a credit card upon filing BK, odds are that account will be closed when that creditor does a routine inquiry of your credit report and discovers the bankruptcy.