It happens weekly. A former client or other creditor contacts the attorney’s office to inquire whether the creditor was listed and discharged in the bankruptcy case.
Despite the fact that generally even unlisted creditors are still discharged, it can sometimes become very time consuming and problematic convincing the creditor that they were discharged despite improper notice.
Making sure all creditors are listed and noticed is essential in any bankruptcy filing. Moreover, getting the correct address is equally important. While generally any notice is sufficient to put a creditor on official notice of a bankruptcy filing, using an address different from that which a creditor designates for bankruptcy notice can limit the recovery in a stay violation action should the creditor violate the automatic stay and attempt collection on the debt during the bankruptcy case.
Under the new bankruptcy laws, creditors may now designate certain addresses to receive bankruptcy notice. Upon doing so, debtors must use this address or the address where they last received two (2) correspondences from the creditor during the 90 days preceding the bankruptcy filing. Failing to use these addresses simply creates a host of problems.
Accordingly, the new bankruptcy laws makes it imperative to properly notice creditors of any bankruptcy filing. Luckily, this can be done quite easily through credit reports that contain official bankruptcy notice addresses. While most credit reports will contain the address of each creditor, a few will also contain the actual “bankruptcy notice” address these creditors have specified to use. Many offices, including ours, now makes these credit reports mandatory. Using a different such address just breeds too much trouble and problems!
Not only does the debtor save all the time and efforts otherwise expended in locating the proper address and manually listing each creditor name-address-account number-balance-date, etc, but they also provide dispositive confirmation that the creditor received actual notice as required under the new laws. And since they are typically only $30 or less for individual and $50 or less for joint, its simply a “no brainer.”
So while $30 may at first blush seem like a waste of money when considering one can manually obtain the proper location information, in the long run, the hours saved and the potential recovery from successful stay violation actions will always exceed the costs of such reports. More importantly, you are also COMPLYING WITH THE LAWS!
Written by Michael G. Doan
Bankruptcy Law Network (BLN)
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Last modified: October 22, 2012