Cite as: Keith M. Lundin, Lundin On Chapter 13, § 36.4, at ¶ ____, LundinOnChapter13.com (last visited __________).
With the petition, Bankruptcy Rule 1007(a)(1) requires the debtor to file either a schedule of liabilities, discussed immediately below, or “a list containing the name and address of each creditor . . . to be included” in the schedules. The list of creditors is not necessary to commence a Chapter 13 case under § 301 of the Code, but filing a list of creditors is one of the debtor’s duties under 11 U.S.C. § 521(a)(1), and the failure to file a list of creditors is one ground for conversion or dismissal in § 1307(c) (but only on the motion of the U.S. trustee).1
Many clerks’ offices resist the filing of a Chapter 13 petition that is not accompanied by a list of creditors or a schedule of liabilities. After the 1993 amendments to Bankruptcy Rule 5005(a), the bankruptcy court clerk is forbidden to refuse to accept for filing any petition or other paper “solely because it is not presented in proper form as required by these rules or any local rules or practices.” Arguably, after the 1993 amendments, the bankruptcy court clerk cannot refuse to accept for filing a Chapter 13 petition that is not accompanied by a list of creditors or a schedule of liabilities. The practical issue, however, is notice. If the petition is not accompanied by a list of creditors and addresses, the clerk is unable to give notice of the filing. Assuming that the court has adopted electronic case filing (ECF), the clerk will expect to receive with the petition, at a minimum, an electronic list of creditors for noticing purposes. Bankruptcy Rule 9036 provides for electronic noticing by the clerk or any other person required to give notice in bankruptcy cases.
There is no official form for the list of creditors.2 However, by local rule or local practice many bankruptcy courts require that the list of creditors be on a matrix suitable for photographic or computer reproduction onto envelopes or mailing labels. In an electronic case filing district, the list of creditors typically is formatted differently from the rest of the documents so that the list can be manipulated to generate electronic notices. Local rules are often very specific about the size and organization of the list. The purpose of this list is to permit the mailing, or electronic transmission,3 of notice of the filing of the Chapter 13 case notwithstanding that the schedules and other documents may not yet be filed.
The number of required copies of the list is determined by local rule or practice. Of course, if ECF has been adopted by the court, paper copies will not be required.
The importance of care in the preparation of the list of creditors and addresses cannot be overemphasized. Typically, debtor’s counsel prepares the list of creditors and addresses from a pile of papers hauled in by the debtor. In a good case, counsel has coupon books, default notices and perhaps a handful of bills from which to work. Too often, creditor addresses are pulled from these documents without regard to the purpose for which the address was given to the debtor. For example, the “payment address” on a mortgage servicer’s coupon book is not likely to be the address the mortgage servicer has designated for “billing inquiries,” and that payment address almost certainly will not be the address of the mortgage servicer’s agent for service of process.
That debtor’s counsel puts down the best address for each creditor that can be coaxed out of the debtor’s papers is a fact of life in Chapter 13 practice; unfortunately, that address is rarely adequate for all purposes in the Chapter 13 case. For example, unless a creditor has filed a proof of claim or a § 342 notice4 designating a different mailing address or the debtor files a schedule of liabilities5 indicating a different address, the addresses on the list of creditors are used for ordinary noticing in the Chapter 13 case—notice of the § 341 meeting of creditors and notice of the deadline for filing proofs of claim.6
In contrast, when the debtor files a motion under Bankruptcy Rule 9013 that commences a contested matter under Bankruptcy Rule 9014, service of the motion is “in the manner provided for service of a summons and complaint by Rule 7004.”7 Under Bankruptcy Rule 7004, service of a motion typically requires more information in the address than is available from the list of creditors. For example, to serve a corporation by mail under Bankruptcy Rule 7004(b)(3) the address must include “to the attention of an officer, a managing or general agent, or to any other agent authorized by appointment or by law to receive service of process.”8 The list of creditors filed by the debtor will rarely include the special “attention” line required by Bankruptcy Rule 7004(b)(3). Many routine events in Chapter 13 cases are initiated by motion and must be served consistent with Bankruptcy Rule 7004—for example, a motion to value collateral under Bankruptcy Rule 30129 or a motion to void a lien under § 522(f).10 Just pulling the name and address of a creditor from the list of creditors will not be adequate for many important tasks after notice of the filing of the case.
Reported cases illustrate the consequences when an address that is adequate for Bankruptcy Rule 2002 purposes is used in a context that triggers a different service standard under Bankruptcy Rule 7004. In In re Nowling,11 a Chapter 13 plan that valued Bank of America’s collateral and stripped off its wholly unsecured lien was mailed to three lockbox addresses used to make loan payments. The bankruptcy court held that service of the plan was inadequate because the relief requested triggered the contested matter rules and required service under Bankruptcy Rule 7004(b)(3):
The Debtors’ argument that . . . the different scheme of notice requirements in Fed. R. Bankr. P. 2002 could meet minimum requirements of due process as mandated in Fed. R. Bankr. P. 7004 is incorrect. The [National Bankruptcy Noticing Center] failed to effect service of the Motion to Value Security as incorporated into the Chapter 13 Plan . . . upon an officer, a managing or general agent, or to any other agent authorized by appointment or by law to receive service of process on behalf of Bank of America as required under the Bankruptcy Rules . . . . [T]he NBNC mailed [the plan] . . . to Bank of America at post office box addresses for loan payments where they were doubtlessly subsequently opened by a mail clerk who was neither an officer, a managing or general agent, or any other agent authorized by appointment or by law to receive service of process on behalf of Bank of America.12
In Reaves v. America’s Servicing Co. (In re Reaves),13 service of a complaint was insufficient under Bankruptcy Rule 7004(b)(3) when the complaint was mailed to a post office box used for payments. The Rule requires that service on a corporation, partnership or other unincorporated association be mailed to the attention of an officer or agent authorized to receive service of process.14
The message for counsel is this: the address you get from the debtor that goes on the list of creditors may be sufficient to give notice of the petition and to engage the automatic stay;15 but for most other actions in the Chapter 13 case, including service of a plan that contains contested matters, the addresses on the list of creditors will often not suffice.
One solution is more care in the preparation of the list of creditors. For example, with respect to any corporate creditor—and most creditors are incorporated—adding the “attention: officer, managing or general agent” line would be a big step toward avoiding the sort of service failure discussed in Nowling and Reaves.
The Bankruptcy Reform Act of 199416 and the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA)17 added wrinkles to the preparation and use of the list of creditors permitted by Bankruptcy Rule 1007(a)(1). Section 342(c) of the Code now requires that any notice given by the debtor to a creditor in a bankruptcy case “shall contain the name, address and last four digits of the taxpayer identification number of the debtor.”18 If the debtor has correctly filled out the petition,19 the debtor’s name and address, but only the last four digits of the debtor’s taxpayer identification number (social security number), will appear on the petition. The debtor’s complete nine-digit social security number will only appear on the statement of social security number (Official Bankruptcy Form 21) separately submitted by the debtor.20 The statement of social security number will not be maintained by the clerk’s office in the public case file.
Prior to the BAPCPA amendments in 2005, § 342(c) required the entire social security number of the debtor on a notice to a creditor. This was problematic because after the December 1, 2003, rules amendments, the nine-digit SSN was not readily available in any public record.21 BAPCPA aligned the Code and Rules somewhat by limiting the SSN on a routine creditor notice to the last four digits. When the notice “concerns an amendment that adds a creditor,” the notice sent to the creditor must include all nine digits of the taxpayer identification number.22
Section 342 was further amended by the 2005 Act to provide several ways for a creditor to control the address for notices in bankruptcy cases. Detailed elsewhere,23 if the creditor within 90 days of bankruptcy supplied the debtor in at least two communications—that included the current account number of the debtor—with an address at which the creditor requested to receive correspondence, then bankruptcy notices required by Title 11 to be sent by the debtor shall be sent to that address and must contain the correct account number.24
Subsections 342(e) and (f) were amended to empower creditors to designate addresses for notices in a specific bankruptcy case or even in all bankruptcy cases by filing a special “notice of address.”25 Notices given by the debtor or the court that do not comply with § 342 requirements “shall not be effective notice until such notice is brought to the attention of such creditor,” and if the creditor has designated “a person or organizational subdivision . . . for receiving [bankruptcy] notices . . . then a notice . . . shall not be considered to have been brought to the attention of such creditor until . . . received by such person or such subdivision.”26 These amendments to § 342 substantially complicate the task of accurate noticing in Chapter 13 cases and create many new burdens for debtors’ counsel—not the least of which is capturing any communication that the debtor received from creditors within the 90 days before the petition.27
Another wrinkle arises when banks are creditors. Section 114 of the 1994 Act amended Bankruptcy Rule 7004 to require that service of process on an insured depository institution in any contested matter or adversary proceeding “shall be made by certified mail addressed to an officer of the institution unless . . .”28 In bankruptcy cases filed after October 22, 1994, to accomplish service of process on most banks, most savings and loans, and many credit unions in contested matters and adversary proceedings, certified mail must be used, addressed to an identified officer of the institution.29
Under practice prior to the 1994 amendments, service upon banks and other insured depository institutions was typically accomplished by first-class mail. Debtors’ counsel are not in the practice of listing or scheduling banks and other insured depository institutions with any address other than an ordinary business address—often a lockbox or payment address. Except as affected by § 342,30 the ordinary addresses are still effective for ordinary notice purposes not involving an adversary proceeding or contested matter. But counsel cannot rely on the ordinary first-class mailing address in the list or schedules for purposes of service of process on a bank or other insured depository institution in any contested matter or adversary proceeding.
Many events within a Chapter 13 case involve banks and become contested matters to which the service of process requirement in Bankruptcy Rule 7004(h) will apply. For example, a Chapter 13 debtor’s motion to value the collateral securing a claim under Bankruptcy Rule 3012 would be a contested matter that must be served on any bank by certified mail addressed to an officer.31
2 But see Official Bankruptcy Form 4, the form for the list of 20 largest unsecured claims in a Chapter 11 (or Chapter 9) case.
3 See Fed. R. Bankr. P. 9036.
4 See § 365.1 [ Section 342: Notice in Chapter 13 Cases after BAPCPA ] § 4.3 Section 342: Notice What Didn’t Happen.
6 See Fed. R. Bankr. P. 2002.
7 Fed. R. Bankr. P. 9014(b).
8 Fed. R. Bankr. P. 7004(b)(3).
11 279 B.R. 607 (Bankr. S.D. Fla. 2002).
12 279 B.R. at 610–11. But see In re King, 290 B.R. 641, 645 (Bankr. C.D. Ill. 2003) (Address from delinquency notice is sufficient to bind mortgage holder to confirmation of a plan that voids its wholly unsecured lien; mortgage holder listed same address for “correspondence/notices” on proof of claim. “The Butler, Wisconsin, post office box address used by the DEBTORS is the same as that requested to be used by BANK ONE, in its proof of claim, for correspondence and notices. . . . BANK ONE’S argument that notice of the bankruptcy filing was sent to the wrong address can only be characterized as frivolous. Even if BANK ONE’S proof of claim requested that notices be sent to a different address, creditors are charged with adopting appropriate internal procedures to properly process bankruptcy notices, and a notice of filing mailed to a mortgagee’s payment address is sufficient.”). See also §§ 272.1 [ Official Bankruptcy Form 10 and Variations ] § 131.1 Official Bankruptcy Form 410 and Variations, 287.1 [ Timing, Procedure and Evidence Presumption ] § 135.1 Timing, Procedure and Evidence Presumption and 365.1 [ Section 342: Notice in Chapter 13 Cases after BAPCPA ] § 4.3 Section 342: Notice What Didn’t Happen.
13 396 B.R. 708 (Bankr. W.D. Tenn. 2008).
14 See also In re Ochoa, 399 B.R. 563 (Bankr. S.D. Fla. 2009) (Marks) (Corporate mortgagee was not properly served with order deeming mortgage current when order was not mailed in compliance with Rule 7004(b)(3)).
15 See § 68.1 [ Usual Protections ] § 58.1 Usual Protections. See, e.g., Mauck v. C-Bass Mortgage Loan Buyout Trust 2000-A (In re Mauck), 287 B.R. 219, 222 (Bankr. E.D. Mo. 2002) (For stay violation purposes, notice to mortgage servicer at the payment address is sufficient. “Defendants contend that the notice was sent to the payment address at Litton which was insufficient to provide notice of the bankruptcy. Defendants do not cite any authority in support of this proposition. To the contrary, courts have recognized that a notice of bankruptcy proceedings sent to a lender’s payment address is sufficient. . . . The Court finds that the notice of bankruptcy sent to this address provided Litton and its principals with notice of the bankruptcy. . . . [W]hen Defendants violated the automatic stay by issuing a foreclosure notice . . . they did so with knowledge of the bankruptcy. Such an action is a willful violation of the automatic stay.”).
16 Bankruptcy Reform Act of 1994, Pub. L. No. 103-394, 108 Stat. 4106 (1994).
17 Pub. L. No. 109-8, 119 Stat. 23 (2005).
18 11 U.S.C. § 342(c)(1), discussed in § 365.1 [ Section 342: Notice in Chapter 13 Cases after BAPCPA ] § 4.3 Section 342: Notice What Didn’t Happen.
19 See § 34.2 [ Petition, Signed by the Debtor ] § 36.2 Petition, Signed by Debtor—“Wet” Signature Issues.
20 See § 34.4 [ Statement of Social Security Number ] § 36.6 Statement of Social Security Number.
21 See §§ 34.2 [ Petition, Signed by the Debtor ] § 36.2 Petition, Signed by Debtor—“Wet” Signature Issues and 34.4 [ Statement of Social Security Number ] § 36.6 Statement of Social Security Number.
22 11 U.S.C. § 342(c), discussed in § 365.1 [ Section 342: Notice in Chapter 13 Cases after BAPCPA ] § 4.3 Section 342: Notice What Didn’t Happen.
23 See § 365.1 [ Section 342: Notice in Chapter 13 Cases after BAPCPA ] § 4.3 Section 342: Notice What Didn’t Happen.
24 11 U.S.C. § 342(c)(2), discussed in § 365.1 [ Section 342: Notice in Chapter 13 Cases after BAPCPA ] § 4.3 Section 342: Notice What Didn’t Happen.
25 11 U.S.C. § 342(e) and (f), discussed in § 365.1 [ Section 342: Notice in Chapter 13 Cases after BAPCPA ] § 4.3 Section 342: Notice What Didn’t Happen.
26 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.
27 See § 365.1 [ Section 342: Notice in Chapter 13 Cases after BAPCPA ] § 4.3 Section 342: Notice What Didn’t Happen.
28 Fed. R. Bankr. P. 7004(h), as amended by Bankruptcy Reform Act of 1994, Pub. L. No. 103-394, § 114, 108 Stat. 4106 (1994).
29 The exceptions to this new requirement of certified mail addressed to an officer are
(1) the institution has appeared by its attorney, in which case the attorney shall be served by first class mail;
(2) the court orders otherwise after service upon the institution by certified mail of notice of an application to permit service on the institution by first class mail sent to an officer of the institution designated by the institution; or
(3) the institution has waived in writing its entitlement to service by certified mail by designating an officer to receive service.Fed. R. Bankr. P. 7004(h), as amended by Bankruptcy Reform Act of 1994, Pub. L. No. 103-394, § 114, 108 Stat. 4106 (1994).
30 See above in this section, and see § 365.1 [ Section 342: Notice in Chapter 13 Cases after BAPCPA ] § 4.3 Section 342: Notice What Didn’t Happen.
31 See § 105.1 [ Valuation, Claim Splitting and Dewsnup ] § 76.1 Valuation, Claim Splitting and Dewsnup.