Expert: Terry Leeders - 4/17/2007

Question
I am about to file chapter 7 as a result of contingent personal liabilities realized due to a distressed asset sale.

I have gone over the specifics of the case many times with multiple attorneys and they are all optimistic this will be a routine case. However, I am finding myself up late at night worrying that I'm going to get tripped up with a technicality with regards to the listing requirements of each creditor on the bankruptcy schedules and subsequently the notice to each creditor based on this information.

My concern stems from the fact that the business wind-down occurred last October and I recently found that the person checking the mail at the temporary p.o. box has not been saving all of the information received.

There are several dozens of business credit cards involved. Some of these accounts have been sent to collections agencies and/or law firms and I no information on them. Additionally, the balances owed as of the last statements I have copies of are 3-6 months old.

Are debts dischargeable the “wrong” address is listed for a creditor? i.e. I might only have the address from the last statement before the debt went into default or the address from the credit bureau. If the creditor has been corresponding via a different address (i.e. their collections department), I unfortunately do not have it in many cases.

Is there any requirement that the creditor’s attorney or collection agency must be notified of a chapter 7 filing if the debt has been turned over to them?

How ‘exact’ does the amount of the debt need to be on the bankruptcy schedules? i.e. I may only have the balance as of 3-6 months ago. I can estimate the current balance based on the interest rate (which may have changed on some of the recent statements I don’t have). Does close count?

How ‘exact’ does the name of the creditor need to be? I have record of the name of the company we made the payments to. i.e. the corporate records might show a personally guaranteed credit card as “NFIB” (National Federation of Independent Businesses), but the underlying bank is MBNA.

I’m aware that the notice requirements for an automatic stay to be effective are somewhat strict. However, my primary concern is ensuring the debts are discharged.  

Answer
You shouldn't have anything to worry about.  The bankruptcy law change a few years ago directed a debtor to serve a creditor on the address reported on a credit report, a national bankruptcy address database..(to my knowledge not yet created) or to an address listed on the last 3 correspondences received from a creditor.  I usually list the creditor from the credit report address, list their attorneys, and also list any collection agencies or attorneys as 'notice only' parties.

As for the amount, you should use your best efforts- ie: from a credit report or recent statement.  Everyone in the process knows interest and late fees constantly run..so you do not need to peg it down to the penny.  Should their be any assets found to liquidate and pay your creditors, the trustee will send them notice to submit a proof of claim which is just a document that the creditor sends to the court with evidence of the exact balance on the date the case was filed.
In the 18 months since this law changed, I have not seen anyone in court in my district, or heard thru the grapevine of a creditor trying to use that code provision arguing that there is no automatic stay in place.  It could have happened, but I haven't seen it.  The rule is really there to allow an unscheduled creditor to still do what they do.