Spend a Little Time Identifying the Legal Name of Your Creditors Now, and Avoid Big Problems Later

In my bankruptcy practice, I always recommend that my clients obtain copies of their credit reports. Why? After 20 years of representing debtors in my consumer bankruptcy practice I know that there is a good chance that my clients have one or more creditors they have forgotten about or quite possibly that they have never heard about.

Since most people want bankruptcy to be a once in a lifetime experience, it makes sense to identify each and every potential creditor. And your credit report is a good place to start this process.

However, your credit report is not the only resource to identify creditors. In my practice, I routinely run a public records search using the Lexis-Nexis public records database. A Lexis-Nexis report may identify judgments and tax liens that might not show up on your credit report.

I also make regular use of the corporations section of the Georgia Secretary of State. To my knowledge every State has an online corporations search capacity that you can use free of charge. I use this online service to properly identify corporate creditors. Recently, for example, I represented a client who owed money to a carpet cleaner. The carpet cleaner was a franchisee of a national carpet cleaning company and advertised under the franchise name. In reality, however, the franchisee had a corporate name unrelated to the national franchise.

Since there was a judgment in this case, I needed to file a Motion to Avoid a Judgment Lien. Arguably, if I did not identify the corporation properly and serve its “registered agent for service,” my Motion to Avoid Lien could be denied or, worse, subject to a collateral attack months or years down the road. Two of the judges in the Northern District of Georgia routinely deny Motions to Avoid Lien because of service issues. Only by cross-checking the corporation and its address through Lexis-Nexis and the Secretary of State was I able to properly identify the plaintiff corporation for purposes of notice and service.

Do not minimize the importance of properly identifying your creditors for notice purposes. Help your lawyer by finding out as much as you can about the legal names of your creditors prior to the filing of your case.