Bankruptcy
NLS 5.19 and later
NLS 5.26 or later is strongly recommended
NLS can be configured to file Chapter 7, 11, and 13 bankruptcy claims and apply settlement results to existing loans.
This feature requires an active account with BankruptcyWatch. A Case Management/Electronic Case Files (CM/ECF) system is also required to access filed documents. Please contact the respective organization for information on registration and usage of their services.
BankruptcyWatch - https://www.bankruptcywatch.com
Pacer - https://www.pacer.gov
Basic Configuration
Basic configuration must be performed before configuring other components of bankruptcy.
Go to Bankruptcy Setup which is located in File > Setup > Loan Setup > Bankruptcy.
Click to add a new bankruptcy configuration.
Item | Comments |
---|---|
Name | The name of this configuration for your own reference. |
Username | Username used to log into BankruptcyWatch. Select the user account to use from the drop down list. The list is comprised of user accounts as configured under the Authorization tab in Setup > System > Web Services.5.22+ |
Password | Click ![]() The password is configured under the Authorization tab in Setup > System > Web Services.5.22+ |
Click the Bankruptcy Endpoint tab and enter the parameters as provided to you.
Item | Comments |
---|---|
URL |
Enter the hostname that is supplied by BankruptcyWatch to access their services. Do not include the protocol (http:// or https://) as this is determined by the Secure option below.
For offline sandbox testing, use offline.sandbox.bk.watch. For CM/ECF sandbox testing, use cmecf.sandbox.bk.watch. |
Port | The port number to use for the URL access. Typically port 443 is used for secure https connections. |
Webhook |
The URL to the NLS Web Service running the BankruptcyWatch webhook.
For hosted clients, please contact Nortridge Support to have our infrastructure team set up your webhook. For licensed clients, see BankruptcyWatch Webhook on setting up your own BankruptcyWatch webhook. Enter the URL from your webhook setup in the form of |
Secure | Select to use a SSL connection (https) for the BankruptcyWatch URL. |
Go to Setup > Loan Setup > Loan Group and in the Servicing Options tab, select the configured bankruptcy setup for Bankruptcy.
Bankruptcy Setup Tab
Consumer Monitoring
Run NLSBKSubscriptions.exe, located in your NLS installation folder, to generate and send a list of contacts to BankruptcyWatch for monitoring.
Click Subscribe to activate the consumer monitoring service provided by BankruptcyWatch.
NLS 5.34 and later
Optional: Enter an email address in the Email Notifications field to where notifications for consumer monitoring is to be sent.Click List Active Items… to view a list of borrowers that are currently subscribed to consumer monitoring.
Case Monitoring
Click Subscribe… to activate the case monitoring service provided by BankruptcyWatch.
Choose the desired case monitoring package and enter the Minimum Payoff Balance for Case Monitoring threshold. This threshold is the minimum payoff balance at which the case monitoring begins.
Minimum Payoff Balance for Case Monitoring is the payoff sum of all the balances under the borrower.
Example
Minimum Payoff Balance for Case Monitoring is set to $800.NLS receives a notification from BKWatch that borrower with SSN=123456789 filed for bankruptcy.
This borrower has three loans with payoff balance of $300, $500, and $200.
NLS will start Case Monitoring with BKWatch if the payoff sum of all loans is greater than or equal to $800.
Example
Enter 1,000.00 to monitor all loans for which the payoff balance is 1,000.00 or more.Optional: Enter an email address in the Email Notifications field to where a file containing all notifications received by NLS is to be sent.
Note
NLS 5.26 to 5.33
Case monitoring subscription must be activated prior to the consumer monitoring subscription being activated for the notification emails to be sent.NLS 5.34 and later
Email notification for consumer monitoring and case monitoring are configured separately and are independent of each other.Events Returned by BankruptcyWatch | Description |
---|---|
Case Discharged | A case was discharged. |
Case Dismissed | A case was dismissed. |
Case Reopened | A case was reopened. |
Case Transferred | A case was transferred from one division to another. |
A case was converted. | |
Case Transferred5.35+
|
A case was transferred. |
Case Terminated5.35+
|
A case was terminated. |
Joint Debtor Discharged | The joint debtor was discharged. |
Joint Debtor Dismissed | The joint debtor was dismissed. |
Plan Confirmed | A chapter 13 plan was confirmed. |
Click List Active Items… to view a list of cases (loans) that are currently subscribed to case monitoring.
Court Credentials
Existing court (CM/ECF) accounts are required to access filed documents for each district courts. Click next to Court Credentials to enter access credentials for each district.
Click to create a new set of credentials for a district.
Item | Comments |
---|---|
ID | This is automatically assigned by NLS. |
Username | Username used to log in. |
Password | Click ![]() |
District | The district code for this credential. |
Description | A description for your own reference. |
Make Default | Select to make this the default credential to use. |
Proof of Claim Setup
Click next to Proof of Claim Setup to specify which amounts are to be included in the claim amount in the proof of claim filing.
The selected items will be included in the claim amount. The principal is always included in the claim amount and is not an option.
NLS 5.32
Added Impounds.The Basis of Claim field is for entering a comma separated list of items to be listed during the proof of claim filing wizard.
Creditor / Signatory Setup
Click next to Creditor / Signatory to configure the “Signature Address” information that is included in the proof of claim sent to BankruptcyWatch.
For Creditor:
- Organization is optional.
- SSN and EIN are mutually exclusive and one of the field is required.
- If a Creditor Number is specified in the proof of claim, the creditor details are not sent to BankruptcyWatch.
- First/Middle/Last must be blank when Organization is specified.
- SSN and EIN must be blank when Organization is specified.
For Signatory:
- Organization is optional.
Trustee / Lawyer Portfolio
When a bankruptcy filing is received by NLS and the associated trustee or lawyer information does not exist in the database, new contacts will be created using the specified configuration.
Click next to Trustee/Lawyer Portfolio to configure the trustee and lawyer contact classification.
Select Override Payment Distribution Order and click to configure the distribution waterfall for payments from the trustee.
Task Template
Click next to Task Template to associate the bankruptcy setup to an existing task.
Status Codes
Bankruptcy related status codes are configured in the Status Codes tab. See Status Codes for additional information on the various options associated with status codes.
Status codes are automatically assigned to loans based on notifications received from BankruptcyWatch.
Bankruptcy Status Code | Consumer Information Indicator Code |
---|---|
Chapter 7 Petition | A - Petition for Chapter 7 Bankruptcy |
Chapter 7 Dismissed Pending | |
Chapter 7 Dismissed | I - Chapter 7 Bankruptcy Dismissed |
Chapter 7 Reaffirmed | R - Reaffirmation of Debt |
Chapter 7 Withdrawn | M - Chapter 7 Bankruptcy Withdrawn Obsolete as of April 21, 2021. |
Chapter 7 Reaffirmation Rescinded | V - Chapter 7 Reaffirmation of Debt Rescinded |
Chapter 7 Discharge Pending | |
Chapter 7 Discharged | E - Discharged through Chapter 7 Bankruptcy |
Chapter 7 Closed | Q - Removes Previously Reported CII |
B - Petition for Chapter 11 Bankruptcy | |
Chapter 11 Plan Confirmed5.35+
|
|
Chapter 11 Dismissed5.31+
|
|
Chapter 11 Withdrawn5.31+
|
|
Chapter 11 Discharged5.31+
|
F - Discharged through Chapter 11 Bankruptcy |
Chapter 13 Petition | D - Petition for Chapter 13 Bankruptcy |
Chapter 13 Pre Plan Confirmed | |
Chapter 13 Plan Confirmed | |
Chapter 13 Dismissed Pending | |
Chapter 13 Dismissed | L - Chapter 13 Bankruptcy Dismissed |
Chapter 13 Withdrawn | P - Chapter 13 Bankruptcy Withdrawn Obsolete as of April 21, 2021. |
Chapter 13 Discharged Pending | |
Chapter 13 Discharged | H - Discharged/Completed through Chapter 13 Bankruptcy |
Chapter 13 Closed | Q - Removes Previously Reported CII |
The following status codes require an action from a user:
Bankruptcy Status Code | Action Needed |
---|---|
Chapter 7 Dismissed Pending | Click ![]() |
Chapter 7 Discharge Pending | Click ![]() |
Chapter 13 Pre Plan Confirmed | Click ![]() |
Chapter 13 Dismissed Pending | Click ![]() |
Chapter 13 Discharged Pending | Click ![]() |
Additional status codes may be created as needed. However, those status codes must be assigned to loans manually.
Processing for BankruptcyWatch
There are two applications, NLSBKSubscriptions.exe and NLSBKNotifications.exe, that will need to be run manually or on a schedule through NLS Service to process files required by BankruptcyWatch.
NLSBKSubscriptions.exe will send a list of contacts—with no active bankruptcies and at least one active loan—in NLS to BankruptcyWatch. It can be configured to run on a schedule by selecting Bankruptcy Subscription as the Target Type in Setup > System > NLS Service.
NLSBKNotifications.exe will process the notifications from BankruptcyWatch and import the details into NLS. It can be configured to run on a schedule by selecting Bankruptcy Notification as the Target Type in Setup > System > NLS Service.
Loan View
Bankruptcy Tab
The Bankruptcy tab in the Loan view contains the bankruptcy inquiry. The information contained within are comprised of data received from BankruptcyWatch and existing data in NLS.
Bankruptcy Ribbon Bar
A Bankruptcy ribbon bar will become available on loans in bankruptcy.
Manual Bankruptcy Process
NLS 5.30 and later
Loans can be placed into a bankruptcy status manually without the use of an automated monitoring service by going to the Home ribbon bar and clicking Add > Add Bankruptcy.
This process simply sets the appropriate status code for the loan and allows for entry of relevant information in the loan’s Bankruptcy tab. Proof of claim, supplemental filing forms, viewing downloaded documents, Docket, and claim register features are not supported.
The bankruptcy Monitoring Status will be set to Manual. If the case number is currently active click next to the Monitoring Status field to enable monitoring. The Bankruptcy Chapter Type, Case Number, and Date Filed fields are required to enable monitoring. The status of the bankruptcy status codes as configured in Setup > Loan Setup > Bankruptcy > Status Codes must also be set to Active.
Transaction Entry
Transaction made on a loan during a bankruptcy can be specified as having been paid by an entity other than the borrower. In the transaction entry dialog, click Advanced… and select the appropriate contact from which the payment was received. The Paid by list includes all contacts associated with the loan in its contact-loan relationship and any contact designated as a trustee in the bankruptcy setup.
BankruptcyWatch Notifications
Contacts
When a contact files for bankruptcy, a “case filed” notification will be received from BankruptcyWatch and NLS will begin monitoring all loans associated with the contact. A contact in bankruptcy will be indicated by a icon next to the name field.
If needed, the filing petition called “Voluntary Petition” may be requested from BankruptcyWatch.
Disposition
By default, NLS will monitor the following dispositions from BankruptcyWatch.
Chapter 7
|
Dismissed |
Discharged | |
Closed / Terminated | |
Chapter 11
|
Converted5.31+ |
Chapter 13
|
Plan Confirmed |
Dismissed | |
Discharged | |
Closed / Terminated |
Existing Bankruptcies
If a contact has an existing bankruptcy at the time the list of contacts are sent to BankruptcyWatch, that contact and its associated loans will not be monitored.
Event Notification
When an event notification is received from BankruptcyWatch, some fields in the Bankruptcy tab will be populated based on the event.
Event Notification | Fields Populated |
---|---|
CASE_FILED |
Case Number
Date Notice Received
Date Filed
Court District Filed
Court Division
Court County
Bankruptcy Chapter Type:
Chapter 7, 11, or 13
Payoff Balance at Time of Filing
Principal Owed at Time of Filing
P+I Arrears at Time of Filing (Total Arrears at Time of Filing prior to NLS 5.32)
Total Principal Payment Due
Total Interest Payment Due
Parties
Status Code:
Chapter 7 Petition, Chapter 11 Petition, or Chapter 13 Petition
![]() |
PLAN_CONFIRMED |
Date of Confirmation
Status Code:
Chapter 13 Plan Confirmed
![]() |
CASE_DISCHARGED |
Date Discharged
![]() |
JOINT_DEBTOR_DISCHARGED5.35+
|
Co-Borrower Discharge Date
![]() |
CASE_DISMISSED |
Date Dismissed
Status Code:
Chapter 7 Dismissed Pending, Chapter 11 Dismissed Pending, or Chapter 13 Dismissed Pending
If Auto-Dismiss Bankruptcy is enabled: Chapter 7 Dismissed, Chapter 11 Dismissed, or Chapter 13 Dismissed
![]() |
JOINT_DEBTOR_DISMISSED5.35+
|
Co-Borrower Dismissal Date
![]() |
CASE_CONVERTED |
BK Conversion Date
Bankruptcy Chapter Type:
New chapter
BK Conversion Chapter:
Old chapter
Status Code:
New status code based on new chapter
![]() |
CASE_REOPENED5.35+
|
Date Reopened
Status Code:
Chapter 7 Petition, Chapter 11 Petition, or Chapter 13 Petition
![]() |
Security Privilege
User and group privileges for bankruptcy may be configured under the Bankruptcy item in the privilege list.
Sandbox Testing
BankruptcyWatch maintains two sandbox environments to test API operations: the first lets clients make API calls in an offline environment that never contacts the court system; the second lets clients use the API to file documents in the QA systems maintained by the bankruptcy courts. If you wish to use the sandbox environments, request a username and password from BankruptcyWatch support.
The offline sandbox allows for the use of the BankruptcyWatch API in an environment that is disconnected from the PACER system, so that API operations that would otherwise incur PACER charges are free. It contains a small collection of cases and documents copied from the PACER system. Most BankruptcyWatch API operations may be called in the offline sandbox, but only certain sets of parameters are supported, corresponding to the limited collection of cases available in the sandbox.
In addition to their production CM/ECF system, many bankruptcy courts provide a QA CM/ECF system for training. These QA systems lets users open cases and file documents with no effect on the court system. The CM/ECF Sandbox allows clients to access the bankruptcy courts' QA systems using the BankruptcyWatch API. To use the CM/ECF sandbox, clients must obtain QA CM/ECF accounts directly from the bankruptcy courts and register them with BankruptcyWatch using CreatePacerAccount.