Bankruptcy Notification

1. Introduction

Title 11 of the United States Code primarily governs bankruptcies for all bankruptcy actions filed within the United States.  A person or business may file a bankruptcy case in federal court when the person or business is unable to pay their debts.  Immediately upon filing a bankruptcy action, the filer is entitled to certain protections from creditors.  This stops all actions such as lawsuits, foreclosures, garnishments, and most collection activities against the filer and the property of the bankruptcy estate. The bankruptcy estate includes all legal or equitable interests of the filer at the time of the bankruptcy filing, including all property in which the filer has an interest, even if it is owned or held by another person. If East Carolina University (University) is listed as a creditor in the bankruptcy estate, the bankruptcy court provides notice of the filing to the University via hard copy and/or electronic copies of bankruptcy related documents. The University may be listed as a creditor in a bankruptcy proceeding for any party with a delinquent account, including  patients, students, employees, and others. The University is responsible for ensuring all collection activity stops.  If the University continues any collection efforts, it may be subject to federal penalties and sanctions from the court for violating the automatic stay. The University is also responsible for ensuring that the bankruptcy documents are available to units that report accounts receivables to the NC Office of State Controller in accordance with N.C.G.S. §147-86.21. The University shall devise techniques and procedures for how units manage the receipt and notice of these bankruptcy documents and to cease any collection activities related to the applicable accounts. The purpose of this regulation is to provide guidance to units throughout the University to ensure that collection actions are halted when an automatic stay is in place to avoid federal penalties and sanctions from the bankruptcy court.

2. Applicability

This regulation applies to any University unit that bills and/or collects receivables from any business or person who has filed for bankruptcy, regardless of the type.

3. University Financial Services Bankruptcy Site (Bankruptcy Site)

The ECU Accounts Receivable Manager is responsible for developing and administering the Bankruptcy Site and procedures for site usage. The Bankruptcy Site is a secure repository for all University bankruptcy notifications, related documents, and communications with campus units.
The information stored in the Bankruptcy Site is confidential and should only be shared with necessary persons for reasons within the normal scope of operations. Any inadvertent disclosure must be reported to the ECU Accounts Receivable Manager and resolved.

4. Departmental Requirements

Each unit that bills and/or collects funds is responsible for establishing a process consistent with State of NC policies and procedures for collections and bankruptcies, including the halting of collections upon notification that a petition for bankruptcy has been filed. Units should designate a representative responsible for utilizing the Bankruptcy Site and following the procedures located within the Bankruptcy Site. Unit representatives are required to conduct annual Health Insurance Portability and Accountability Act (HIPAA) training and one-time Family Educational Rights and Privacy Act (FERPA) training. Bankruptcy documents received by a unit should have their unit representative create the record and upload the documents. If a unit is aware of a bankruptcy and needs access to case information in Public Access to Court Electronic Records (PACER), and does not have their own access, the unit can contact the Office of University Counsel (OUC). OUC can provide a history page, the bankruptcy petition, the notice of meeting of creditors, and any discharge documents if applicable. Legal advice related to bankruptcy matters is provided to units, upon request, by the appropriate ECU attorney. Additionally, do not resume any collection efforts prior to contacting OUC, even if the bankruptcy case is no longer active. Any action taken to collect on a debt discharged through a bankruptcy proceeding may result in federal penalties and sanctions.