Hey, Mr. Postman Is That A Lawsuit?

Bankruptcy court has nation wide venue

09 Jan Hey, Mr. Postman Is That A Lawsuit?

The mail carrier brings a envelop with official looking papers that name you in a law suit. It says something about U.S. Bankruptcy Court.

So what? you think. It’s not official til I’m served with papers by a human being. Due process and all…

Think again. One of the unique features of Title 11 is service of process by first class mail.

That’s right. You can be properly served with a bankruptcy law suit by the post man. There won’t be a process server delivering bad news to your house. All it takes is a postage stamp.

Timelines for response to a law suit in bankruptcy court are shorter than in most state courts. The time for filing an answer starts to run, not with service of the summons, but from its issuance by the clerk of the bankruptcy court. So time moves quickly if you are a defendant. Get advice from an experienced attorney promptly.

The last time we got a major overhaul in insolvency law, 1978, the drafters tried to eliminate an entire world of pointless, time consuming legal fights about jurisdiction by giving the bankruptcy court nationwide jurisdiction. That means that you could be party to an adversary proceeding in a bankruptcy court in the next state or even on the far coast, if you have some connection to the debtor in that case.

Bankruptcy court has nation wide venueThe reach of the bankruptcy courts gets magnified when you consider the tendency for large corporations to file their Chapter 11′s in Delaware, where the bankruptcy courts are supposed to be debtor friendly, or in Manhattan. The venue rules in bankruptcy allow a wide choice for debtors who can file where ever they have assets.

The postmark on that oh-so-important envelop may be from courts far distant and it has local impact.

Nationwide service of process by mail works in favor of my debtor clients when we are trying to strip off a mortgage lien or challenge the dischargeability of a debt. For the price of a postage stamp, my clients can bring Chase, or Bank of America, or U.S. Bank to the San Francisco Bay Area bankruptcy court. No need for expensive and time consuming personal service. Put the summons and complaint in the mail, first class, post paid, and let’s talk about the merits of our adversary.

So, respect the power of a postage stamp if it brings you a bankruptcy summons and complaint.

Images courtesy of Smithsonian’s National Zoo.

 

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Cathy Moran, Esq.

I'm a certified specialist in bankruptcy law (California State Bar Board of Legal Specialization) practicing in the San Francisco Bay Area for more than 30 years. In addition to practicing bankruptcy law, I train new practitioners at Bankruptcy Mastery.
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