It seems to happen all the time. A debtor files a Chapter 7 petition and within several months receives her §727 discharge. Shortly thereafter, the bankruptcy clerk’s office closes the case pursuant to §350(a) and Federal Rule of Bankruptcy Procedure 5009 (Fed. R. Bankr. P.).

Within months, the debtor is contacted by a long forgotten landlord, credit card issuer, or relative whose debt was not listed on the schedule of creditors and who is now demanding payment. The nervous debtor contacts the bankruptcy attorney and explains that their failure to list the debt was a mistake, the result of forgetfulness or inadvertence.

If you happen to have filed your bankruptcy in Arizona, which is part of the 9th Circuit, it may not matter as long as your omission of the creditor was not intentional. If your case was what is commonly referred to as a no asset Chapter 7 case the 9th Circuit Court of Appeals has ruled that a creditor who was inadvertently left off of the creditors’ list is still a discharged debt. In re: Beezley, 994 F.2d at 1435-36. At least one Arizona Court of Appeals agrees with the Beezley Court. Webber v. Grindle Audio Productions, Inc. 60 P.3d 224 (Ariz. Ct. App. 2002).

Both the 9th Circuit and the Arizona Court of Appeals reasoned that in a no asset Chapter 7, there are no assets to distribute to any creditor, listed or not. Because the case is a no asset Chapter 7 a date is not set for submitting proofs of claims. No asset cases do not require filing proofs of claims. Fed. R. Bankr.P. 2002(e).

What happens then when grandma decides to sue you for that loan she gave you years ago that you failed to list in your bankruptcy? She will more than likely bring suit in a State Court. What can the State Court do? The 9th Circuit Court of Appeals has determined that they do not have the jurisdiction to determine whether your debt to grandma is dischargeable or not. In re: Lon McGhan, 288 F.3d 1172 (9th Cir. 2002) citing Gruntz v. County of Los Angeles (In re Gruntz), 202 F.3d 1074 (9th Cir.2000) (en banc). It appears that grandma will have to go to the Bankruptcy Court to determine if her claim is discharged or not. Based on the discussion above, the Bankruptcy Court should determine that the debt has been discharged and any action in the State Court is void.

Please bear in mind that this article only applies in Arizona and the 9th Circuit. And, as always, please consult with a qualified attorney who is familiar with the decisions in your jurisdiction.

If you are located in Phoenix, Scottsdale, or Tempe, contact the Contact Wright Law Offices online or call 480-845-0145 to set up a free consultation. This article is not meant to be a substitute for legal advice from an attorney.

Read more about our bankruptcy services…

Receive a FREE Consultation

Use the form below or call us at 602-456-6085 today. We’re here to help.

    Our Locations

    • Phoenix Office – New
      Wright Law Offices 
      2999 N. 44th St., Ste 250
      Phoenix AZ 85018 

      Telephone: 602-456-6085 / 866-703-3287
      Phoenix Law Office

    • Phoenix Office – Old
      Wright Law Offices 
      668 N. 44th St., Ste 320
      Phoenix AZ 85008 

      Telephone: 602-456-6085 / 866-703-3287
      Phoenix Law Office
    • Scottsdale Office 
      Wright Law Offices 
      7135 East Camelback Road, Ste 230
      Scottsdale AZ 85251 

      Telephone: 480-845-0145 / 866-703-3287
      Scottsdale Law Office

    • Tempe Office 
      Wright Law Offices 
      2238 S. McClintock Dr.
      Tempe AZ 85258 

      Telephone: 480-845-0145 / 866-703-3287
      Tempe Law Office

    • Avondale Office
      Wright Law Offices 
      12725 W Indian School Rd, Suite E-101
      Avondale AZ 85392 

      Telephone: 623-258-4480 / 866-703-3287
      Avondale Law Office

    • Mesa Office
      Wright Law Offices 

      4856 E. Baseline Rd.
      Suite #104
      Mesa, AZ 85206
      Telephone: 480-845-0145 / 866-703-3287
      Mesa Law Office

    • Glendale Office 
      Wright Law Offices 
      20325 N. 51st Ave., Suite 134
      Glendale, AZ 85308
      Telephone: 623-258-4480 / 866-703-3287
      Glendale Law Office

    What our clients are saying…


    Mr. Wright and his staff were amazing. They made a negative situation a lot better and turned it into a positive. Could really tell they care helping people and I will refer their Phoenix Bankruptcy Attorney firm to friends and family. Thanks again.


    I called around looking for the right bankruptcy lawyer and came across Benjamin Wright. He personally called me for the consultation seeing how I live in Kingman AZ. He was very helpful from the start and his staff was very friendly and explained any questions I had, sorry for all the questions. I would definitely recommend Wright law offices, and I do!! Thanks for everything, you made what seemed like a hard thing to do simple!! You guys rock!!!


    Great lawyer, he really helped my mother out of a jam. She was totally new to bankruptcy and he talked with us for about an hour and a half to make sure she wouldn’t be worried.


    Ben is a kind and down to earth attorney. He worked around my busy schedule as a single mom (school, full-time job, and daycare pick up and drop off times). He explained absolutely everything to me and was good about e-mailing. I am writing this review as a THANK YOU.


    I had a very positive experience with Attorney Wright. He or his staff returned my e-mails and calls promptly (even after business hours occasionally). His fees were reasonable. He was patient with me when I showed up in court missing an important document. He is aggressive, but fair and nice.