What’s in a Name?

A bankruptcy case is part lawsuit, part financial accounting. Before filing bankruptcy, the debtor must make a good faith effort to account for and disclose all of his creditors and debts; monthly income and expenses; and describe and value all assets. In addition, the federal law requires the debtor to disclose financial transactions, such as a sold automobile, cashed out stock, or transferred real estate prior to filing bankruptcy. The debtor and his attorney may spend many hours probing the debtor’s finances, including investigating bank accounts; tax returns; mortgage documents; titles and deeds; and retirement accounts.

Considering all the meticulous preparation before filing bankruptcy, it’s remarkable when a debtor (and his attorney) files a case under a false name. Let me explain. Suppose your name is Sally. Your parents, teachers, friends, spouse, co-workers, pastor. . . everyone knows you by Sally. Your credit cards, debit card, and library card all say Sally.

The only problem is, your birth certificate name is Sarah.

The government knows you as Sarah, not Sally. Your driver’s license and your social security card identify you as Sarah, so “Sarah” is the name you must use on the bankruptcy petition. That is also the name you must use when completing the pre-bankruptcy credit counseling course and the post-bankruptcy financial management class.

“But wait,” you say, “everyone other than the government knows me as Sally.” The bankruptcy petition form gives a debtor an opportunity to list nicknames, trade names, names used in doing business, former married name(s), and maiden name immediately after the debtor’s legal name:

All Other Names used by the Debtor in the last 8 years

(include married, maiden, and trade names):

Alias information is indexed into the bankruptcy system and is searchable for creditors. All notices sent by the bankruptcy court contains alias information provided by the debtor.

Other common pseudonym situations that may cause trouble include:

• Using “Sr.” to identify the father of a “Jr.” when the father has not legally changed his name with the government.
• Using a married name when the spouse has not legally changed his or her name.
• Using a maiden name after divorce without legally changing the name with the government (even if the change is authorized or ordered by the divorce court).

Bankruptcy Rule 1005

Rule 1005 of the Federal Rules of Bankruptcy Procedure requires a debtor to include the “name, employer identification number [if any], last four digits of the social-security number, any other individual-taxpayer identification number, and all other names used” within eight years before filing the petition. This information helps creditors to (1) correctly identify the debtor when they receive notices and orders from the court, (2) comply with the automatic stay, (3) file a proof of claim, and (4) exercise other rights given to them by the Bankruptcy Code. A failure to list correct identifying information on a petition fails “to notify creditor about the relevance of the bankruptcy proceeding to some of its claims.” See Ellet v. Stanislaus, 506 F.3d 774 (9th Cir.2007).

Consequences

It is important to make sure that all creditors know about the bankruptcy proceeding and are allowed to exercise their rights in the case. A debt owed to a creditor who is not given proper notice of the bankruptcy may not be discharged and the liability may continue despite the completion of the bankruptcy case. See 11 U.S.C. § 523(a)(3). While an error on the debtor’s petition is correctable by filing an amendment, the error may cause delay in the case. In one case out of the Ninth Circuit, the time for filing creditor objections was extended when the debtors’ name was misspelled on the petition. See In re Diepholz, 2012 WL 4747238 (9th Cir. B.A.P.).

It is essential to provide the proper legal name and all other names used by the debtor when filing a bankruptcy case. Notice to creditors is an essential part of the bankruptcy process; without it, the debtor’s fresh start may stall at the starting line.