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Getting Noticed - Through Electronic Bankruptcy Noticing

3.2.2010

Many times clients ask us whether it is possible to provide a pre-selected address that must be used by bankruptcy debtors for bankruptcy notices. When bankruptcy notices are sent to a creditor at the address provided by the debtor to their bankruptcy attorney, problems arise because, for example, the address may be outdated, may be for a lender's lockbox used solely for collection of accounts receivable, or may be for an office within the company that is not familiar with the debtor's account or is not staffed with employees who understand the significance of the notice and how to respond to protect the company's interests. At best, these problems cause delay in responding to the notice, and at worst, can lead to missed deadlines, waived claims and even monetary sanctions for violation of the automatic stay. The good news for creditors is that some of these problems can be avoided through electronic bankruptcy noticing (EBN).

The 2005 revisions to the United States Bankruptcy Code included Section 342(f), which allows creditors to register a preferred address with the National Creditor Registration Service (NCRS). The NCRS is a free service provided through the United States Bankruptcy Court system. Although creditors may designate a preferred U.S. Mail address for notices, those who prefer electronic notices have three options: e-mail, fax or electronic data interchange (EDI) (designed for high volume recipients of 200 or more notices per week).

For electronic notices, any creditor that has the required technology may participate in EBN. Not only can EBN help recipients eliminate numerous pieces of paper, but electronic notices are delivered days faster than the U.S. Mail and to the address or attention of the individual you designate. Not all types of bankruptcy notices are included in EBN, but arguably the most important one is - the notice of commencement of the debtor's bankruptcy case. This notice typically includes critical information like the petition date (which is also the date the automatic stay went into effect), the location of the filing, the bankruptcy chapter under which the debtor filed, the date and place of the Section 341 first meeting of creditors and the deadline for filing proofs of claim. Receipt of this important notice is the first step in ensuring that the automatic stay is not violated, thereby avoiding potential liability for sanctions as a result of collection activity undertaken after the bankruptcy petition date.

Signing Up for Electronic Noticing

This article summarizes your EBN options. To obtain additional information, updated details regarding technical requirements and to download forms, you should visit the BNC's EBN website at http://ebn.uscourts.gov or the National Creditor Registration Service website at https://ncrs.uscourts.gov. In addition, the BNC provides toll-free help desk support for all aspects of EBN at 877-837-3424.

Please note that during the first 30 days of your EBN service, the BNC will send notices in your chosen electronic format as well as by U.S. Mail so that both sides can confirm the process is working properly.

Being an EBN Partner for Internet E-mail

When you fill in the Noticing Agreement, you must identify the name(s) and address(s) and name synonyms (spelling variations, including common misspellings, of your name) to which electronic notices are to be sent. The BNC determines that a notice should be sent electronically by comparing the name synonyms and addresses listed on your Noticing Agreement with the names and addresses that the debtor lists on his petition. The BNC software will attempt to match the name (without punctuation) and address and send the notice electronically. Understanding the matching process and providing numerous name variations and related names is critical for those who wish to maximize the benefits of EBN. Installation of Adobe Acrobat PDF reader software is also required.

Being an EBN Partner for Fax

Fax participants must have an open fax line and working machine in place for notice transmittals in the evening hours. The BNC will make three attempts to deliver the notice by fax. If no confirmation of receipt is received within three attempts, the BNC will mail the document the following day. Should electronic noticing delivery to you be unsuccessful three consecutive times, the service will be terminated without further notice and only mailed copies will be sent. The BNC will include one fax cover sheet for all notices from the same district, showing the name and address of the recipient, case number, court form code, originating court, date, and total number of pages. If a single notice exceeds 30 pages, it will be mailed instead. A notice or combined fax will not exceed 30 pages because the BNC will break the transmission into segments containing no more than 30 pages each.

As with e-mail noticing, it is critical for participants to provide numerous name variations, common misspellings and related names in the Noticing Agreement in order to maximize the matching process and benefits of EBN.

Being an EBN Partner for EDI

For high volume creditors, the BNC will use the EDI system to transmit only the variable information in certain bankruptcy notices, e.g., debtor names and 341 Meeting locations, rather than the entire notice text. EDI software companies support the instructions contained in the transmission to "map" the variable notice information to electronic data fields so that the recipient can view the entire notice.

Entities not already using EDI for other applications, such as invoicing, must purchase and install EDI software and obtain an electronic mailbox account for EDI notice transmissions. According to the BNC, the benefit of EDI to creditors who receive thousands of bankruptcy notices is expected to be substantially greater than the costs to switch to EDI processing. Lower volume creditors are more likely to benefit from e-mail or fax noticing.

In Summary

EBN has limitations, but if you are confronted with numerous bankruptcy notices or need to know quickly when a bankruptcy is filed, EBN may be the answer to helping you efficiently manage this unwelcome form of mail.

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