1996 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

3-11-1996

Judd v. Wolfe

Precedential or Non-Precedential:

Docket 95-5141

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Recommended Citation

"Judd v. Wolfe" (1996). 1996 Decisions. Paper 213.

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1 

UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

 ___________ 

No. 95-5141 

___________ 

 SUSAN JUDD, 

 Appellant

 vs. 

 LAWRENCE WOLFE 

 SUSAN JUDD, 

 Debtor 

___________ 

Appeal from the United States District Court 

for the District of New Jersey 

(D.C. Civ. No. 94-cv-05574) 

___________ 

 

Argued 

January 25, 1996 

Before: STAPLETON, MANSMANN and LEWIS, Circuit Judges. 

(Filed March 11, 1996) 

___________ 

Joseph M. Pinto, Esquire (ARGUED) 

Joseph F. Polino, P.C. 

Moorestown Times Square 

720 East Main Street 

Suite 1C 

Moorestown, NJ 08057 

 COUNSEL FOR APPELLANT 

George H. Hulse, Esquire (ARGUED) 

Hulse & Germano 

406 High Street 

P.O. Box H 

Burlington, NJ 08016 

 COUNSEL FOR APPELLEE 

___________ 

OPINION OF THE COURT 
2 

__________ 
3 

MANSMANN, Circuit Judge. 

 Debtor Susan Judd appeals from a decision of the 

district court, affirming the bankruptcy court's denial of her 

motion to reopen her bankruptcy case pursuant to 11 U.S.C. 

§350(b). Judd sought to reopen her no-asset Chapter 7 bankruptcy 

case for the sole purpose of amending her schedules to add a 

creditor whose name had been omitted. 

 We are confronted with a question of first impression 

for us: if a debtor, in a Chapter 7, no-asset, no-bar date 

bankruptcy proceeding fails to list a claim on its schedule of 

creditors and the bankruptcy case is closed, is the debt 

nonetheless discharged pursuant to 11 U.S.C. §§ 727(b) and 

523(a)(3), or must the debtor move the bankruptcy court, pursuant 

to 11 U.S.C. § 350(b), for an order reopening the closed 

proceeding to add the omitted creditor for the purpose of 

discharging the claim? 

 We hold that in a no-asset, no-bar date case, 

dischargeability is unaffected by scheduling. After a case is 

closed, the debt in question was either discharged or excepted 

from discharge based on sections 523 and 727(b). Therefore, the 

filing of a motion to reopen is not necessary to discharge the 

debt if the statutory exceptions to discharge do not apply. 
4 

I.0

 Susan Judd and Lawrence Wolfe were married on December 

27, 1985. They separated on January 15, 1990 and subsequently 

were divorced on April 26, 1991. 

 After the parties separated, Judd remained in the 

marital home. On December 24, 1990, pursuant to Article 2, 

Paragraph 2.2 of the Property Settlement Agreement incorporated 

into their Final Judgment of Divorce, Wolfe executed a quitclaim 

deed which conveyed the marital home at 127 E. 7th Street, 

Burlington, New Jersey, to Judd. Judd agreed to assume 

responsibility to pay the outstanding mortgage and to indemnify 

Wolfe in the event that he had to make any payments on the 

mortgage.0 Judd continued to pay the monthly mortgage payments 

on the home until February, 1993. On February 22, 1993, 

financial circumstances caused Judd to file a Chapter 7 petition 

in bankruptcy. Judd's Chapter 7 petition listed the home at 127 

E. 7th Street as an asset on Schedule "A" of the petition, with a 

fair market value of $93,000.00, subject to a secured claim of 

$92,014.75. The first mortgagee on the property, Mortgage Access 

Corporation, was listed under Schedule "D" of Judd's petition as 

 

0 We recite the facts as Judd alleges them. It should be 

understood, therefore, that our recitation does not constitute 

findings. 

0 Prior to the marriage, the marital home was owned by 

Judd. Judd obtained the property through equitable distribution 

in a prior divorce proceeding. 

 In December, 1989, Judd conveyed an equal interest in 

the marital home to Wolfe. Upon this conveyance, the parties 

refinanced the existing first mortgage, borrowing additional 

money to consolidate debts and make home improvements. The 

parties executed a note and a mortgage. 
5 

a secured creditor with a claim of $92,014.75. Due to the fact 

that Wolfe was also obligated on the mortgage, this debt --listed 

as a home mortgage -- was listed as a joint debt on Schedule "D" 

of Judd's petition. Although her attorney listed the debt as a 

joint debt on Schedule "D" of the bankruptcy petition, he did not 

list Wolfe as a creditor or co-debtor. Because she had no other 

assets available for distribution to her creditors in bankruptcy, 

no bar date was set by the court establishing a deadline for 

creditors to file proofs of claim. 

 On February 25, 1993, after reviewing Judd's Chapter 7 

petition, the Bankruptcy Court Clerk, in accordance with the 

applicable rules, notified the creditors listed in Judd's 

schedules of the date set for the meeting of creditors and the 

last day for the filing of complaints to determine the 

dischargeability of debts pursuant to 11 U.S.C. § 523(c). In 

accordance with Bankruptcy Rule 2002(e), no deadline for filing 

claims was set; rather, creditors were notified that it was 

unnecessary to file claims as there were no assets to distribute. 

However, in accordance with Bankruptcy Rule 4007(c), a deadline 

for filing complaints pursuant to 11 U.S.C. § 523(c) to determine 

the dischargeability of certain debts was set. This deadline of 

May 25, 1993, passed without any complaints being filed. On 

April 29, 1993 the trustee abandoned his interest in the marital 

home. On July 14, 1993, Judd received a Discharge in Bankruptcy. 

On July 16, 1993, Judd's case was closed. 

 In March, 1994, after Judd's bankruptcy case was 

closed, the first mortgagee, Mortgage Access Corporation, filed a 
6 

complaint in foreclosure listing both Judd and Wolfe as 

defendants. Subsequently, Wolfe sought indemnification from Judd 

pursuant to their property settlement.0 Accordingly, on August 

15, 1994, Judd filed a motion to reopen her Chapter 7 proceedings 

so that she could list Wolfe as a creditor and discharge her 

obligation to him. In his August 31, 1994, opposition, Wolfe 

alleged that he learned for the first time in July, 1994, that 

Judd had filed for bankruptcy, that she had not paid the mortgage 

for over one and one-half years, and that a complaint in 

foreclosure had been filed. According to Wolfe, despite the 

facts that Judd lives within a couple of miles of him, knows 

where he lives, has been to his home, knows where he works and 

knows his phone number, she never communicated anything to him 

regarding either her failure to make mortgage payments since 

January 1993 or the filing of the foreclosure suit.0

 

0 

 In July 1994, Wolfe filed a motion to enforce his 

rights under the Judgment of Divorce and Property Settlement 

Agreement in the Superior Court of New Jersey, Chancery Division, 

Burlington County. Wolfe asked the court to: (1) order Judd to 

satisfy the present mortgage arrearages for the former marital 

residence; or alternatively, direct Judd to execute a quit claim 

deed to the former marital residence in favor of Wolfe; (2) 

direct Judd to reimburse Wolfe for all costs he had or would 

incur with respect to the foreclosure of the property; (3) award 

Wolfe the immediate right of possession; (4) award Wolfe counsel 

fees; and (5) impose any other equitable relief the court deems 

just. Judd opposed Wolfe's motion. The motion was granted and 

the case is now pending before the Superior Court of New Jersey, 

Appellate Division. 

0 Upon obtaining all of this information, Wolfe contacted 

the mortgage company, which agreed to reinstate the mortgage if 

he cured the arrearages. He claimed he had the ability to obtain 

a home equity loan on his existing home for this purpose, but 
7 

 Wolfe opposed Judd's motion to reopen on the grounds of 

unfair prejudice. Wolfe's primary concern was that his credit 

worthiness would be harmed as a result of Judd's failure to pay 

the mortgage. In addition, he was concerned that he would be 

liable for any deficiency at a foreclosure sale. Wolfe opined 

that if he had been listed as a creditor initially, he would have 

received notice of the bankruptcy and could have taken steps at 

that time to take over the property, pay the mortgage, avoid 

additional interest and penalties and avoid any damage to his 

credit.0

 On September 12, 1994, finding that Wolfe had 

demonstrated that he would be prejudiced by a reopening, the 

bankruptcy court denied Judd's motion to reopen.0 The bankruptcy 

 

would only do so if he owned Judd's residence, which he was 

seeking in the state court action. 

 Wolfe estimated that the mortgage arrearages for the 

property from January, 1993 to August 31, 1994, were over 

$20,000. Wolfe stated further that there was no equity in the 

property. The house was worth $96,000.00 with a principal 

balance of $92,000.00, plus the $20,000 in arrearages. 

0 Judd contended that she had given her attorney a copy 

of the Divorce Judgment and Property Settlement Agreement, 

quitclaim deed and mortgage payment slip, advising him that the 

debt to Mortgage Access Corporation was a joint debt with Wolfe. 

She asserted that she relied upon the expertise of her bankruptcy 

counsel and that she was not aware of the fact that Wolfe had not 

been listed as a creditor. In any event, she maintains the 

failure to list Wolfe was not done maliciously, intentionally or 

with an attempt to defraud or harm him. 

 

0 The bankruptcy court found that: 

Here, there is no question that prejudice has 

been experienced by the potential creditor, 

in terms of the growth of the balance due to 

the mortgage company by the lack of 
8 

court subsequently denied Judd's motion for reconsideration filed 

pursuant to Local Bankruptcy Rule 3(b) and F.R.B.P. 8002(b).0 

 On appeal to the United States District Court, the 

court affirmed the bankruptcy court's order denying Judd's motion 

to reopen. In its decision, the district court did not reach the 

question of whether the debtor's obligations to Wolfe had been or 

 

information provided to the creditor in this 

obligation. She agreed to indemnify and hold 

harmless her ex-husband on this obligation, 

while he had availability to find out the 

status, he had no obligation to continue to 

review the status on an ongoing basis. On 

the other hand, it was her obligation to 

advise him, at least, that she would not be 

able to indemnify him or that the obligation 

was growing when she ceased payments in 

January 1993 and then filed a bankruptcy 

petition in '93, and I believe left the house 

in January of '94 or February, perhaps. 

I believe that there is insufficient basis to 

reopen the Chapter 7 case, primarily because 

the creditor has shown himself to be 

prejudiced by such a reopening, and I will 

deny the motion. 

(JA 50-11 to 51-1). 

0 Specifically, the bankruptcy court found: 

And while you might say that accrual of 

interest in and of itself is not the --

sufficient prejudice, is not the kind of 

prejudice that would justify denying the 

reopening and an adding of a creditor. We 

looked at the global circumstances, if you 

will, to conclude that indeed, he was 

prejudiced, not only by the accrual of 

interest but -- the foregoing of options and 

by the negative impact on credit, that he 

could have avoided at the time if he would have been proper named 

in the ordinary course. . . . If he had the burden of proof to 

show prejudice, he met that burden. 

(JA 56-18 to 21). 
9 

should be discharged, after deciding that that question was not 

properly before the court. (JA 41). 

 The district court had jurisdiction pursuant to 28 

U.S.C. § 158(a)(1) and (c). We have jurisdiction pursuant to 28 

U.S.C. § 158(d). 

II. 

 We begin with an examination of the scope of the 

discharge Judd received from the bankruptcy court. Section 

727(b) of the Bankruptcy Code defines the scope of a Chapter 7 

debtor's discharge: "Except as provided in section 523 of this 

title, a discharge under subsection (a) of this section 

discharged the debtor from all debts that arose before the date 

of the order for relief under this chapter . . . ." 11 U.S.C. 

§727(b). (Emphasis added.) As other courts have observed, "The 

operative word in this section is `all.'" In re Beezley, 994 

F.2d 1433, 1435 (9th Cir. 1993) (citing In re Mendiola, 99 B.R. 

864, 865 (Bankr. N.D. Ill. 1989) (regarding § 727(b), a prebankruptcy debt is discharged whether or not it is scheduled); In 

re Stecklow, 144 B.R. 314, 317 (Bankr. D. Md. 1992) ("breadth of 

the discharge" under section 727 is "comprehensive") and In re 

Thibodeau, 136 B.R. 7, 8 (Bankr. D. Mass. 1992) ("§ 727(b) itself 

makes no exception for unlisted debts")). Because section 

727(b), on its face, does not create an exception for unlisted or 

unscheduled debts, every prepetition debt is discharged under 

section 727(b) subject to the provisions of section 523(a)(3). We 

thus turn to section 523(a)(3). 
10 

 Section 523(a)(3) creates two categories of unscheduled 

debts: (1) those that are "of a kind specified in paragraphs 

(2), (4), or (6) of this subsection," and (2) those that are not 

of such kind.0 Those debts that are not of the kind specified in 

paragraphs (2), (4), or (6) of section 523(a) are resolved by 

reference to section 523(a)(3)(A). 

 Section 523(a)(3)(A) excepts from discharge certain 

debts that were: 

Neither listed nor scheduled . . . in time to 

permit . . . timely filing of a proof of 

claim, unless such creditor had notice or 

actual knowledge of the case in time for such 

timely filing . . . . 

 

0 Section 523(a) provides in pertinent part: 

 (a)A discharge under 

section 727 . . . of this title 

does not discharge an individual 

debtor from any debt-- 

 (3)neither listed nor 

scheduled . . . in time to permit-- 

 (A)if such debt is not of 

a kind specified in paragraph (2), 

(4), or (6), of this subsection, 

timely filing of a proof of claim, 

unless such creditor had notice or 

actual knowledge of the case in 

time for such timely filing; or 

 (B)if such debt is a kind 

specified in paragraph (2), (4), or 

(6) of this subsection, timely 

filing of a proof of claim and 

timely request for a determination 

of dischargeability of such debt 

under one of such paragraphs, 

unless such 

creditor had notice or actual knowledge of the case in time for 

such filing and request[.] 
11 

Because this is a "no-asset" Chapter 7 case, the time for filing 

a claim has not, and never will, expire unless some exempt assets 

are discovered; thus, section 523(a)(3)(A) cannot be applied in 

Judd's circumstances. See Stone v. Caplan, 10 F.3d 285, 289, 

n.13 (5th Cir. 1994) (observing that if no proof-of-claim 

deadline has ever been set, section 523(a)(3)(A), by its own 

terms, is inapplicable). Because section 523(a)(3)(A) does not 

apply here, Judd's debt to Wolfe was discharged by operation of 

law at the time of her discharge on July 14, 1993, unless her 

debt to Wolfe falls under sections 523(a)(2), (4), or (6). 

 Debts listed in sections 523(a)(2), (4) and (6) 

describe debts which arise from intentional torts such as fraud. 

They include debts incurred by "false pretenses, false 

representation or actual fraud . . . " (523(a)(2)); debts 

incurred by "fraud or defalcation while acting as a fiduciary 

. . ." (523(a)(4)); and debts "for willful and malicious injury 

. . ." (523(a)(6)). Section 523(a)(3)(B) excepts from discharge 

"intentional tort" debts that were not listed. Since section 

523(c) provides that the dischargeability of these debts must be 

determined by the bankruptcy court and Bankruptcy Rule 4007(c) 

requires a complaint to be filed before the discharge is entered, 

section 523(a)(3)(B) preserves the right of these creditors to 

litigate the dischargeability of their debts. 

 For most creditors, the fundamental right enjoyed in 

bankruptcy is the right to file a proof of claim because filing a 

claim is obviously necessary in order to participate in the 
12 

distribution of the estate's assets.0 In re Stark, 717 F.2d 322 

(7th Cir. 1983). Section 523(a)(3)(A) honors this right, by 

excepting from discharge, debts owed to creditors who did not 

know about the case in time to file a claim. In a case where 

there are no assets to distribute, however, the right to file a 

proof of claim is a hollow one.0 An omitted creditor who would 

not have received anything even if he had been originally 

scheduled, has not been harmed by omission from the bankrupt's 

schedules and the lack of notice to file a proof of claim. Thus, 

in a no-asset Chapter 7 case where no bar date has been set, we 

conclude that there would be no purpose served by reopening a 

 

0 For creditors holding intentional tort claims, the 

right to file a proof of claim exists parallel to the creditor's 

right to secure an adjudication of non-dischargeability. 

Accordingly, section 523(a)(3)(B) excepts intentional tort debts 

from discharge notwithstanding the creditor's failure to file a 

timely complaint under section 523(c), if the creditor did not 

know about the case in time to file such a complaint. 11 U.S.C. 

§ 523(c). We do not understand Wolfe to be asserting such a 

claim before us at this time. 

 As § 523(a)(3)(B) applies only when the omitted claim 

is one which might have been excepted from discharge if the 

creditor had the opportunity to timely file a complaint under 

§523(a)(2), (4) or (6), and as Wolfe has conceded that he is not 

asserting such a cause of action, § 523(a)(3)(B) is inapplicable. 

0 In recognition of this, Bankruptcy Rule 2002(e) allows 

a court to dispense with the necessity of filing proofs of claim 

in a no-asset case. Bankruptcy Rule 2002(e) provides: 

In a Chapter 7 liquidation case, if it 

appears from the schedules that there are no 

assets from which a dividend can be paid, the 

notice of the meeting of creditors may 

include a statement to that effect; that it 

is unnecessary to file claims; and that if 

sufficient assets become available for the 

payment of a dividend, further notice will be 

given for the filing of claims. 
13 

case to add an omitted creditor to the bankrupt's schedules. If 

the debt at issue is not a debt described under section 

523(a)(2), (4) or (6), the debt has been discharged by virtue of 

section 727(b), whether or not it was listed. If, however, the 

debt is a debt that falls under sections 523(a)(2), (4) or (6), 

the debt is not discharged by virtue of section 523(a)(3)(B). 

III. 

 Believing that reopening her case and amending her 

schedules was necessary in order to discharge her debt to Wolfe, 

Judd moved to reopen her case pursuant to section 350(b) of the 

Bankruptcy Code. This section provides that a bankruptcy case 

may be reopened ". . . to administer assets, to accord relief to 

the debtor or for other cause". 11 U.S.C. § 350(b). 

 Apparently, both the debtor and the creditor here 

labored under the misapprehension that the issue of whether 

Wolfe's claim was or was not discharged would be resolved, either 

explicitly or implicitly, by the court's decision on Judd's 

motion to reopen pursuant to 11 U.S.C. § 350(b). It appears that 

the bankruptcy judge also assumed that if Wolfe was not listed as 

a creditor, his claim would not be subject to discharge. Because 

we have concluded that the issue of whether Wolfe's claim under 

the Property Settlement Agreement was or was not discharged, 

notwithstanding its lack of scheduling, is resolved by sections 
14 

727(b) and 523(a)(3)(A) of the Bankruptcy Code, Judd's motion to 

reopen was unnecessary.0 

 Our interpretation of sections 727(b) and 523(a)(3) is 

consistent with that of the Court of Appeals for the Ninth 

Circuit. In In re Beezley, 994 F.2d 1433 (9th Cir. 1994), the 

debtor, Gilbert Beezley, appealed a decision affirming the 

bankruptcy court's denial of his motion to reopen his bankruptcy 

case pursuant to 11 U.S.C. § 350(b), arguing that the bankruptcy 

court abused its discretion by failing to grant his motion to 

reopen. Based upon the assumption that an amendment was 

necessary to discharge a debt, Beezley sought to add an omitted 

debt to his schedules. Beezley's case, like ours, was a noasset, no-bar date Chapter 7 case. The Court of Appeals 

concluded that after such a case is closed, dischargeability is 

unaffected by scheduling if the omitted debt is the type of debt 

covered by 11 U.S.C. § 523(a)(3)(A), because it has already been 

discharged pursuant to 11 U.S.C. § 727(b). The court noted as 

well that if the debt is the type of debt covered by 11 U.S.C. 

 

0 See In re Mendiola, 99 B.R. 864, 865 (Bankr. N.D. Ill. 

1989) (reopening the case to amend schedules would not affect the 

rights or liabilities of the parties, but would be an exercise in 

futility); In re Karamitsos, 88 B.R. 122 (Bankr. S.D. Tex. 1988) 

(the filing of an amended creditor schedule after discharge has 

been granted in a no-asset Chapter 7 case has absolutely no 

effect on the dischargeability of the debt); In re Guzman, 130 

B.R. 489 (Bankr. W.D. Tex. 1991) (scheduling or not scheduling a 

creditor has no impact on whether the creditor's claim is 

discharged; § 727 extends discharge to all prepetition debts and 

applies without regard to whether the debt is listed in the 

schedules). Accord In re Thibodeau, 136 B.R. 7 (Bankr. D. Mass. 

1992); In re Anderson, 72 B.R. 495 (Bankr. D. Minn. 1987); In re 

Peacock, 139 B.R. 421 (Bankr. E.D. Mich. 1992). 
15 

§523(a)(3)(B), then it has not been discharged and is nondischargeable.0 

 In an attempt to evade Beezley's application to his 

case, Wolfe argues that his case has substantial factual 

differences from Beezley and the typical no asset case where the 

unscheduled creditor has either a judgment, a liquidated money 

claim or is a party to a consumer transaction with the debtor. 

Rather here, observes Wolfe, the debtor and the creditor were 

previously married, divorced, and the "claim" which the debtor is 

attempting to discharge is an indemnification agreement for a 

joint mortgage obligation incorporated into a Judgment of 

Divorce. According to Wolfe, the relationship of the parties, 

the nature of the underlying debt at issue and the debtor's 

breach of the Property Settlement Agreement cry out for the 

"equitable approach" adopted by other courts and not the strictly 

mechanical approach of Beezley. See, e.g., Stark v. St. Mary's 

Hospital, 717 F.2d 322 (7th Cir. 1983) (holding in a no-asset 

bankruptcy case a debtor may reopen the estate to add an omitted 

creditor where there is no evidence of fraud or intentional 

design); Robinson v. Mann, 339 F.2d 547 (5th Cir. 1964) (noting 

in exceptional circumstances, the bankruptcy court may exercise 

its equitable discretion to allow amendment, considering the 

 

0 In view, however, of allegations of fraud in the 

transaction that gave rise to the underlying claim, the court did 

not decide whether the particular debt at issue was discharged. 

See In re Beezley, 994 F.2d at 1441. There, the creditor, Cal 

Land, in a memorandum filed in opposition to Beezley's motion to 

reopen, advised the court that it would seek to establish that 

the debt was nondischargeable under section 523(a)(3)(B). 
16 

factors offered in justification of the failure to list the 

creditor in question: the failure of counsel to have originally 

listed the creditor, the degree of disruption which would result 

from allowing the amendment, and whether any creditor including 

the unlisted creditor would be prejudiced thereby); Stone v. 

Caplan, 10 F.3d 285 (5th Cir. 1994) (allowing out-of-time 

amendments if exceptional circumstances and equity require it). 

Because these cases supplant the analysis required under section 

727(b) and section 523 and substitute a test involving equitable 

considerations completely foreign to these sections of the 

Bankruptcy Code, we disagree. 

 We decline to hold that the issue here, whether Judd's 

debt to Wolfe is discharged pursuant to sections 523(a)(3)(A) and 

727(b), turns on whether the omission of Wolfe from Judd's 

schedules was made in good faith, for the Bankruptcy Code does 

not impose a requirement of good faith for the discharge of an 

omitted debt in a no asset, no bar date case. "No where in 

section 523(a)(3) is the reason why a debt was omitted from the 

bankruptcy schedules made relevant to the discharge of that 

debt." In Re Beezley, 944 F.2d at 1439. As the Court of Appeals 

for the Ninth Circuit observed there, such a holding would 

interpose "an equitable barrier between the debtor and his 

discharge that Congress simply did not enact in the Bankruptcy 

Code." Id. 

 The plain language of section 523(a)(3) represents a 

congressional policy choice. Clearly, Congress could have 

exempted from the debtor's discharge, pursuant to sections 727(b) 
17 

and 523, debts that were omitted intentionally, rather than 

merely inadvertently, from the debtor's schedules. Congress 

chose not to do so. Unless Wolfe can show that his claim falls 

under the statutory exceptions of section 523(a)(2), (4), or (6), 

his debt has been discharged by operation of law. Wolfe has 

declined to do so. 

 We review a bankruptcy court's refusal to reopen a 

closed case pursuant to 11 U.S.C. § 350(b) for abuse of 

discretion. Fourteenth Avenue Security Loan Ass'n v. Squire, 76 

F.2d 799 (3d Cir. 1938); Matter of Gershenbaum, 598 F.2d 779 (3d 

Cir. 1979). Having concluded that Judd's debt to Wolfe was 

discharged by application of statute, we hold that the bankruptcy 

court did not abuse its discretion in declining to reopen her 

case.0

IV. 

 At oral argument, Judd further argued that although 

amending her schedules at this juncture would not affect the 

discharge of her debt to Wolfe, we should nonetheless remand this 

case so that the bankruptcy court may reconsider whether or not 

to reopen Judd's bankruptcy case for the limited purpose of 

adding Wolfe's name to Judd's list of creditors. Judd asserts 

that as a practical matter, it is important for her to have all 

of her creditors listed so that her schedules accurately reflect 

 

0 We note that the bankruptcy court's findings with 

respect to any prejudice suffered by Wolfe are of no moment. The 

type of prejudice alleged by Wolfe is legally irrelevant to 

discharge pursuant to sections 727(b) and 523. 
18 

the discharge of her debts. Judd asserts that, as a condition of 

acquiring new credit, prospective lenders may require that all 

discharges appear on her schedules. Because section 350(b) of 

the Bankruptcy Code permits the court to reopen a case "to accord 

relief to the debtor, or for other cause", Judd's arguments may 

have merit in this regard. 

 Here, we are unable to determine whether there may be 

such cause to reopen this matter. In any event, this issue is 

best addressed by the bankruptcy court in the first instance. 

 We note, however, that allowing Judd to list all of her 

discharged creditors is in keeping with the practical 

considerations pertinent to Chapter 7 debtors, and in keeping 

with the primary purpose of the Bankruptcy Act of affording 

debtors a fresh start. See, e.g., In re McKinnon, 165 B.R. 55 

(Bankr. D. Maine, 1994) (maintaining the accuracy of a debtor's 

schedules is sufficient cause to reopen a no-asset case). Not 

only will amending Judd's schedules ensure the comprehensiveness 

of her Chapter 7 discharge, making it easier for her to obtain 

credit in the future, but amending her schedule to add Wolfe as a 

creditor also ensures that if assets are later discovered, Wolfe 

would receive notice to file a proof of claim, enabling him to 

participate in any distribution of Judd's assets. See In re 

Henson, 70 B.R. 363 (Bankr. N.D. Ill. 1987). These are 

considerations which, we are confident, the bankruptcy court will 

consider. We will thus vacate the district court's order and 

remand this case to the district court for reference to the 

bankruptcy court. 
19