You Gotta Know The Rules If You’re Gonna Play The Game

Do you know the difference between “notice” and “service in a bankruptcy case?”
Picture of Stephen Dunne, Esq.

Stephen Dunne, Esq.

Philadelphia bankruptcy, credit report, and debt collection abuse attorney

Do you know the difference between “notice” and “service in a bankruptcy case?”
Picture of Stephen Dunne, Esq.

Stephen Dunne, Esq.

Philadelphia bankruptcy, credit report, and debt collection abuse attorney

Today is the day.

It’s past time you had someone in your corner.
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Rules of Bankruptcy Procedure

The Federal Rules of Bankruptcy Procedure deal with notice and service in bankruptcy cases.  Rule 2002 governs “notice” of general matters that typically concern all parties, such as the deadline for filing proofs of claim and notice of the confirmation hearing.  Notice may be given by first class mail.

Rule 7004, on the other hand, governs “service” of matters that typically involve only certain parties (i.e., adversary proceedings and contested matters). Rule 7004 incorporates certain provisions of Fed.R.Civ.P. 4 requiring personal delivery but, like Rule 2002, also authorizes service by mail.

The Difference between Notice and Service

The biggest difference is that notice can be addressed to the entity’s name only, i.e. Bank of America while service must be directed to the attention of an officer, i.e. Brian Moynahan, CEO of Bank of America or a managing or general agent or to any other agent authorized by appointment or by law to receive service of process.

Although this difference may seem trivial, bankruptcy courts are increasingly finding insufficient service under Rule 7004(b)(3) when not directed to the attention of an appropriate individual or office. In other words, the debtor’s motion will be dismissed for insufficient service.

When is Service Required?

Service as opposed to notice is required in adversary proceedings (Rule 7001) and contested matters (Rule 9014).  Therefore, an adversary complaint and summons must be served and, under Rule 7004(b)(3), must be addressed “to the attention of” an appropriate individual or office.  Second, by virtue of Rule 9014(b), service also is required in contested matters.

What is a Contested Matter?

Rule 9014(a) states in part that “In a contested matter not otherwise governed by these rules, relief shall be requested by motion….” Subsection (b) then states that “the motion shall be served in the manner provided for service of a summons and complaint by Rule 7004.”  Other bankruptcy rules, however, specify what is a contested matter by referencing Rule 9014 in their text. Under these rules, contested matters include:

  • a proceeding to avoid a lien or other transfer of exempt property;
  • a motion to sell property free and clear of liens and other interests;
  • a motion for an order of contempt; and
  • a motion to remand a removed claim or cause of action.
  • certain proceedings to dismiss, convert or suspend a case;
  • a proceeding to contest any act or failure to act by the U.S. Trustee;
  • an objection to confirmation or modification of a chapter 13 plan;
  • a motion for relief from the automatic stay or to prohibit or condition the use, sale or lease of property;
  • a motion for authorization to use cash collateral;
  • a motion for authority to obtain credit;
  • a motion for abstention pursuant to 28 U.S.C. §1334(c);
  • an objection to the proposed use, sale or lease of property;
  • a proceeding to assume, reject or assign an executory contract or unexpired lease, other than as part of a plan;
  • a proceeding to compel assumption or rejection of an executory contract or unexpired lease;

Service under Rule 7004(b)(3)

Rule 7004 incorporates certain provisions of Fed.R.Civ.P. 4 that require personal service by any person at least 18 years of age who is not a party. Rule 7004 also allows service within the United States by first-class mail. Different mailing requirements exist depending on the status of the party being served (e.g., an individual, an officer or agency of the United States, an infant or incompetent person, etc.).

Rule of Thumb – Use the Corporate Officer’s Actual Name

Many courts have found defective servicer aka insufficient service where the debtor used the following – Attention: President of Bank of America. It’s best to specify the corporate officer’s actual name and double-check that they are presently employed by the corporation by reviewing the corporate website. For instance, a contested motion to Bank of America should be mailed to:Brian Moynahan, CEO of Bank of America. A quick search of the Bank of America website reveals that Brian Moynahan is currently employed by Bank of America.

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