§ 131.2     Official Form 410 after BAPCPA
Cite as:    Keith M. Lundin, Lundin On Chapter 13, § 131.2, at ¶ ____, LundinOnChapter13.com (last visited __________).
[1]

The proof of claim form, Official Form 10, was quickly reorganized and slightly amended to reflect the passage of BAPCPA. One part of the Official Form that was not changed—the “name and address where notices should be sent”—could have more impact on bankruptcy practice than any of the changes in the new form.

[2]

The substantive changes to Official Form 10 are in the section headed “Unsecured Priority Claim.” BAPCPA amended § 507(a) of the Code to add new priority claims, to reorder some existing priority claims and to redefine other priority claims.1

[3]

Domestic support obligations (DSOs) under § 507(a)(1)(A) or (B) were redefined and elevated to first priority by BAPCPA, and Official Form 10 was amended accordingly. This bumped down other pre-BAPCPA priorities in § 507(a) and necessitated further changes to Official Form 10. The amounts of some priority claims were adjusted on the Official Form consistent with 11 U.S.C. § 104(b). The new priority in § 507(a)(10) for claims for death or personal injury resulting from the unlawful operation of a motor vehicle or vessel while the debtor was intoxicated did not make it into Official Form 10, as amended, but would be specified as “other” in the unsecured priority claim section of the amended form.

[4]

As before BAPCPA, Official Form 10 contains a box in which a creditor is supposed to fill in the “name and address where notices should be sent.” Under Bankruptcy Rule 2002(g)(1), notices required to be mailed to a creditor under Rule 2002 must be addressed as the creditor directs if a proof of claim filed by the creditor designates a mailing address.2

[5]

Detailed elsewhere,3 § 342(e)(1), as amended by BAPCPA, contains this important new notice provision:

(e)(1) In a case under chapter 7 or 13 of this title of a debtor who is an individual, a creditor at any time may both file with the court and serve on the debtor a notice of address to be used to provide notice in such case to such creditor.
(2) Any notice in such case required to be provided to such creditor by the debtor or the court later than 5 days after the court and the debtor receive such creditor’s notice of address, shall be provided to such address.4

New § 342(e) is one of the ways specified by BAPCPA for the debtor or the court in a Chapter 13 case to give “effective notice” in a Chapter 13 case.

[6]

The issue is likely to arise whether the designation of a name and address where notices should be sent on the face of a proof of claim constitutes the filing of a notice of address for purposes of new § 342(e). The proof of claim is certainly filed with the court as required by § 342(e). But the new section requires that a notice of address must be both “filed with the court” and “serve[d] on the debtor” to have the effect described in new § 342(e).

[7]

It is not routine for creditors to “serve” a proof of claim on the debtor when a proof of claim is filed with the bankruptcy court. Service on the debtor is a term of art under Bankruptcy Rule 7004(b)(9), which requires, for example, mailing by first-class mail to the debtor at the address shown in the petition or statement of affairs and to the debtor’s attorney if the debtor is represented by an attorney.5 If a proof of claim is both filed with the court and served on the debtor (and the debtor’s attorney), designation of a name and address where notices should be sent on the face of Official Form 10 might be interpreted to satisfy the requirements for designation of a notice of address under § 342(e)(1). If so interpreted, notices thereafter by the debtor or by the court would be effective if provided to the name and address the creditor designated on the proof of claim form.

[8]

Similar issues could arise under new § 342(f). An entity can file with any bankruptcy courts to provide notice in pending Chapter 13 (and Chapter 7) cases.6 Thirty days after filing such a notice, the specified address must be used for all required notices to the entity in all courts or in the courts specified by the entity. Although a proof of claim is not routinely handled by most bankruptcy courts the same as a notice of address, a proof of claim filed with a bankruptcy court that designates a name and address in the box provided on the Official Form could be (mis?)interpreted as the notice of address permitted by new § 342(f).

[9]

Under new § 342(g)(1), notice provided to a creditor by the debtor or the court other than in accordance with § 342 “shall not be effective notice” until that notice is “brought to the attention” of the creditor.7 The new phrase “brought to the attention” is not defined by BAPCPA, but § 342(g)(1) states that if a creditor designates a person or organizational subdivision to be responsible for receiving bankruptcy notices and if the creditor establishes reasonable procedures so that bankruptcy notices receivable by the creditor are delivered to that person or subdivision, then a notice provided to the creditor other than in accordance with § 342(g) is not brought to the attention of the creditor until the notice is received by the designated person or subdivision.8

[10]

New § 342(g)(1) also implicates the proof of claim form. When a creditor supplies the name and address where notices should be sent on the face of an Official Form 10, does that constitute the designation of a person or organizational subdivision responsible for receiving bankruptcy notices? If a bankruptcy notice is sent by the court or by the debtor to the name and address designated on the face of a proof of claim, will the creditor be estopped to assert that a different person or organizational subdivision was responsible for receiving bankruptcy notices for § 342(g)(1) purposes? From a creditor’s perspective, is the designation of a name and address where notices should be sent on Official Form 10 a trap with respect to effective notice and new § 342(g)(1)? New § 342(g) does not reveal how a creditor should designate a person or organizational subdivision to receive bankruptcy notices. Until that process is fleshed out by the courts or rules, creditors should think twice as they fill in the name and address where notices should be sent on Official Form 10.

[11]

There are issues here for debtors and trustees as well. It is not a universal practice for debtors and Chapter 13 trustees to cull names and addresses from proofs of claim filed by creditors in Chapter 13 cases. In some districts, Chapter 13 trustees attempt to collect names and addresses of creditors from proofs of claim, but the process can be confused when a creditor, for example, makes a separate appearance in the Chapter 13 case either directly or through an attorney. Courts, debtors and trustees cannot always tell which address given by a creditor is the “correct” address for notice purposes in the Chapter 13 case.

[12]

After BAPCPA, debtors and trustees (and courts) must pay closer attention to the names and addresses supplied by creditors on proofs of claim. Even if the proof of claim is filed but not served on the debtor, the name and address designated by the creditor on Official Form 10 could be determinative of “effective notice” under § 342(g). Debtors’ attorneys not routinely keeping track of names and addresses designated by creditors on proofs of claim should consider whether new procedures are necessary in light of § 342(g).

[13]

These issues need further attention from the rules and forms drafters. There shouldn’t be any confusion about how a creditor files and serves the notice contemplated by new § 342(e) or (f). Designating a person or organizational subdivision for § 342(g) purposes should be a unitary, clearly identified procedure easily accessed by all bankruptcy players. The possibility of confusion when a creditor designates the name and address where notices should be sent on a proof of claim should be clarified so that everyone knows whether Official Form 10 has any function in determining effective notice under new § 342. In the meantime, debtors and trustees should consider the name and address designated by a creditor for notice on a proof of claim as a name and address used for notice purposes in the Chapter 13 case. Creditors should consider whether a routine practice of designating a name and address for notice on proofs of claim is in the creditor’s best interest.


 

1  See §§ 440.1 [ New and Changed Priority Claims ] § 73.3  Priority Claims Added or Changed by BAPCPA443.1 [ Filing Fees ] § 73.11  Filing Fees after BAPCPA.

 

2  Fed. R. Bankr. P. 2002(g)(1) states:

 (g)
Addressing notices
 

 

(1) Notices required to be mailed under Rule 2002 to a creditor, indenture trustee, or equity security holder shall be addressed as such entity or an authorized agent has directed in its last request filed in the particular case. For the purposes of this subdivision—
(A) a proof of claim filed by a creditor or indenture trustee that designates a mailing address constitutes a filed request to mail notices to that address, unless a notice of no dividend has been given under Rule 2002(e) and a later notice of possible dividend under Rule 3002(c)(5) has not been given; . . . .

 

3  See § 365.1 [ Section 342: Notice in Chapter 13 Cases after BAPCPA ] § 4.3  Section 342: Notice What Didn’t Happen.

 

4  11 U.S.C. § 342(e), discussed in § 365.1 [ Section 342: Notice in Chapter 13 Cases after BAPCPA ] § 4.3  Section 342: Notice What Didn’t Happen.

 

5  See Fed. R. Bankr. P. 7004(b)(9).

 

6  See 11 U.S.C. § 342(f), discussed in § 365.1 [ Section 342: Notice in Chapter 13 Cases after BAPCPA ] § 4.3  Section 342: Notice What Didn’t Happen.

 

7  See § 365.1 [ Section 342: Notice in Chapter 13 Cases after BAPCPA ] § 4.3  Section 342: Notice What Didn’t Happen.

 

8  11 U.S.C. § 342(g)(1), discussed in § 365.1 [ Section 342: Notice in Chapter 13 Cases after BAPCPA ] § 4.3  Section 342: Notice What Didn’t Happen.