Bankruptcy Requests for Special Notice - - They Should Be Filed Once a defendant in a state court lawsuit has filed a bankruptcy, many of our local California Courts require that a Notice of Stay be filed (oftentimes requiring a copy of the Bankruptcy Notice or Petition be attached). Because most California Judges in civil cases are under "Fast Track" pressures to move their cases along, they exert constant pressure on plaintiff's counsel to prosecute their matters in an expeditious fashion. Accordingly, they expect to be promptly appraised of a bankruptcy stay (and its subsequent discharge or dismissal). Notwithstanding the bankruptcy, plaintiff's counsel is still the attorney of record in the state court proceeding. Therefore, the attorneys are charged with the responsibility of fulfilling the court's notification requirements. The purpose of our office filing a Request for Special Notice in a bankruptcy is done to insure that we promptly receive notification in the event the bankruptcy is dismissed, converted or discharged. If the bankruptcy is dismissed, the state court case should timely resume. If the bankruptcy is converted, a Relief from Stay motion or proof of claim may need to be filed. If a discharge is entered in the bankruptcy case, a dismissal needs to be filed in the state court proceeding and the client needs to evaluate their options regarding any co-debtors and collateral. In any event, the creditor's next steps depend upon obtaining accurate and prompt bankruptcy status information. It should be noted that our clients should not automatically assume that we receive all bankruptcy notices from the court, bankruptcy trustee or the debtor's attorney. Copies of all communications regarding a bankruptcy should be forwarded immediately to our office if it relates to a file we are handling.

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