Track Down All The Client’s Creditors

creditorsWhile a new client may seek out a bankruptcy lawyer when they are served with a lawsuit, they may overlook the plaintiff in that very  suit when listing their creditors.

Pretty amazing, but if you rely on the client to identify their creditors, their list will often omit creditors who didn’t send them a bill this month.  Or creditors they want to continue paying. Or people they don’t want to know about the bankruptcy.

Creditors without notice of the debtor’s bankruptcy case may not be discharged (§523(a)(3)), so it behooves the bankruptcy lawyer to ferret out the balance of the creditors.

Where do you find the non obvious creditors?

  • Lawsuits
  • Guarantees of debts of others: kids, partners, businesses
  • Hold harmless or indemnity clauses in marital settlement agreements
  • Parties to accidents or other incidents involving the client
  • Credit reports
  • Marital settlement agreements
  • Claims against the debtor’s corporate business
  • Leases for business premises or equipment

The better your understanding of the debtor’s financial life, the more likely it is that you can fill in the gaps in the list of creditors and get your client the most debt relief possible.


Dealing with the omitted creditor later


  1. When preparing the petition and filling the creditors addresses, can we use the address from the regular statements they sent to our clients? What do we do when the court send us a “return mail” from one of those creditors? Do we have to provide another address to the court? If yes, how do we do this… amending the corresponding schedule?

    • Cathy Moran, Esq. says

      Take a look at Bankruptcy Code 342(c) on the issue of where to give notice to a creditor. This provision was added in 2005 with the intent to free creditors from consequences of stay violations if notice wasn’t “correct”. Note though that it applies only to notices “given by the debtor”, which triggered all sorts of speculation on its scope. I haven’t followed whether there has been case law on this point.

      I get the original bills and find any correspondence or biling inquiry address on the statement. If the client can’t produce the bills, then reluctantly I’ll use a credit report. It’s our experience that the credit report addresses are often dead ends.

  2. The correct address is the “correspondence” or “billing inquiry” address from the bill, NOT the remittance or payment address.

    You can amend the schedule for the correct address, or serve the notice yourself and make a proof of service and file it with the court.

  3. How do you find the correct address for Agent of Service in California for a bank when preparing motion to value colalteral?

    • Cathy Moran, Esq. says

      Banks are generally national, and don’t “qualify” to do business in California like other entities. You serve a bank by mailing your documents to a named officer of the bank, registered mail. I check the web, find the name of the president and sent it to the headquarters and perhaps also to any address I have from proof of claim or other prepetition dealings with the debtor. I’d rather spend a little more and cover the field than have my default rejected for improper service.