Initial Steps to Take When You Receive a Discharge Complaint
By James J . Haller , Esq . Haller Law Lincolnshire , Illinois
Have you ever received an adversary proceeding to determine a debt is nondischargeable or that the debtor ’ s entire discharge should be denied ? These pleadings are usually received from ECF / PACER regardless of whether the attorney has agreed ( or is required by local rule ) to represent the client in this proceeding . This article suggests the initial steps to take and considerations through the first meeting with the client .
Upon receipt read the complaint thoroughly and examine the exhibits . Note the deadline to respond to the complaint in this summons . Compare the factual allegations in the complaint with the information in your file . Determine whether any of the allegations are contrary to the disclosures listed in the debtor ’ s petition , schedules or statement of financial affairs .
Determine if there were any errors or omissions in the preparation of the bankruptcy documents . If so investigate the circumstances and consider contacting your malpractice insurance carrier . 1 If errors were made , immediately prepare amendments that accurately disclose the information and upon the client ’ s review and approval , file with the Bankruptcy Court .
Review the case file to determine whether the Defendant was actually served with the Complaint . Bankruptcy Rule 7004 ( e ) requires personal service of the summons and complaint within 7 days after the summons is issued . If the summons is served by mail , then it must be deposited in the mail within 7
1 Bankruptcy Rule 1009 ( a ) allows liberal amendments of the disclosures . “ General Right To Amend . A voluntary petition , list , schedule , or statement may be amended by the debtor as a matter of course at any time before the case is closed . The debtor shall give notice of the amendment to the trustee and to any entity affected thereby . On motion of a party in interest , after notice and a hearing , the court may order any voluntary petition , list , schedule , or statement to be amended and the clerk shall give notice of the amendment to entities designated by the court .” days after the summons is issued . If the Defendant is not served within 90 days after the complaint is filed , the Defendant may move to dismiss the action without prejudice . See F . R . Civ . P . 4 ( m ) made applicable to bankruptcies per F . R . Bankr . P . 7004 ( a )( 1 ).
The next step is to notify the client . The communication should be reasonably calculated to be received by the client . It is good practice to send the client a registered letter enclosing the summons , complaint and exhibits along with an email enclosing same . The communication should include at a minimum 1 ) the deadline to file a response and the consequence if no response is filed ; 2 ) a deadline for the client to set up an appointment to discuss the complaint and possible representation ; and 3 ) a warning that failure to set up an appointment will mean the firm cannot represent the client in that matter .
Put the deadlines on your calendar . Include the deadline to respond to the complaint and the deadline for the client to set up an appointment . If the client doesn ’ t meet the appointment deadline , send the client a non-representation letter ( in the same manner above ) that the firm is not representing him in the adversary proceeding . Enclose the same information as your previous letter ( deadlines , documents , etc .). It is also good practice to set reminder deadlines several weeks out from the
28 CONSUMER BANKRUPTCY JOURNAL Spring 2018 National Association of Consumer Bankruptcy Attorneys