3/08
I owe my family some money, do I have to list them?
Yes.
If you owe anyone money, you have to list them. You may have heard you don't have to list debts you don't want to "go bankrupt" on. This is wrong and dangerous -- when you deliberately don't put down some debt, you are committing a crime. (It is not a crime to mistakenly leave out a debt, only to do it on purpose.)
Most people don't want to wipe out their debt to family. But your family was never going to sue you for the bill were they? So would they really care if you wiped it out?
Nothing will prevent you from voluntarily repaying any debt you wiped out, including what you owe your family. Repaying them before can create worse problems, see here.
If your concern is you don't want them to know you had to file bankruptcy, that's harder to deal with. You don't really have a choice. In order to get rid of the other debts, you have to include anything you owe now. If your family legally forgave the debt you owed them, it may not be required that it be listed anymore. But that may be harder to accomplish than simply telling them upfront that you may need to file bankruptcy.
In reality, most people are sympathetic when they find out you need to file. Sometimes they're too sympathetic. Many times we've had to face family willing to nearly bankrupt themselves in order to help our clients avoid the "shame" of filing bankruptcy. Only if family is very wealthy does it make sense. Most of the time we encourage folks to help our clients recover from bankruptcy and rebuild their credit after filing, instead of trying to pay off debt instead of filing.
If you owe anyone money, you have to list them. You may have heard you don't have to list debts you don't want to "go bankrupt" on. This is wrong and dangerous -- when you deliberately don't put down some debt, you are committing a crime. (It is not a crime to mistakenly leave out a debt, only to do it on purpose.)
Most people don't want to wipe out their debt to family. But your family was never going to sue you for the bill were they? So would they really care if you wiped it out?
Nothing will prevent you from voluntarily repaying any debt you wiped out, including what you owe your family. Repaying them before can create worse problems, see here.
If your concern is you don't want them to know you had to file bankruptcy, that's harder to deal with. You don't really have a choice. In order to get rid of the other debts, you have to include anything you owe now. If your family legally forgave the debt you owed them, it may not be required that it be listed anymore. But that may be harder to accomplish than simply telling them upfront that you may need to file bankruptcy.
In reality, most people are sympathetic when they find out you need to file. Sometimes they're too sympathetic. Many times we've had to face family willing to nearly bankrupt themselves in order to help our clients avoid the "shame" of filing bankruptcy. Only if family is very wealthy does it make sense. Most of the time we encourage folks to help our clients recover from bankruptcy and rebuild their credit after filing, instead of trying to pay off debt instead of filing.
