Sometimes a little information can go a long way toward evaluating a credit risk and deciding the next step to take.  If you are not already familiar with the following resources, most of which are free, you might want to take note of them in your “resource file” for future reference:

Corporate Formation and Status, UCC Records

Whether you need to confirm the correct corporate name of your customer, find out whether they are incorporated or operate as a sole proprietorship, whether they are in good standing with the state in which they are located, or get a look at annual reports and other documents, a useful resource is the website for the Secretary of State (or State Corporation Commission or similar name) of the state where the business was created or operates.  For example, at the North Carolina Secretary of State’s website, http://www.secretary.state.nc.us/Corporations/, you can click on “Search by Corporation Name” to search for the customer by name, and once located, view additional information and copies of filed documents at no charge.  Similar websites exist for virtually every state.

In addition, the Secretary of State type websites typically allow you to view summary lists and actual copies of all Uniform Commercial Code financing statements that have been filed with respect to a particular company.  For example, in North Carolina see http://www.secretary.state.nc.us/ucc/ and click on “UCC Research” to search by company name.  This gives you quick, free access to information on what other companies are dealing with your customer on secured financing or leasehold transactions.

Real Estate Records

Many counties now provide free internet access to real property records so that you can check on the ownership of a particular piece of property and view deeds (to see who the co-owners are, check on sales and transfers), mortgages, liens or deeds of trust and property tax values.  For example in Wake County, go to http://www.wakegov.com/general/tax/default.htm and click on “Search Real Estate Records” to search by owner name or street address.

Bankruptcy Records

Whether you suspect a bankruptcy filing by your customer, want to confirm a filing has occurred or want to monitor the status of an existing case, for a small fee you can access the Bankruptcy Court’s records via the internet.  “PACER” (Public Access to Electronic Court Records) is the service where you can access this information: http://pacer.psc.uscourts.gov/cgi-bin/links.pl (providing a link to the PACER site for every Bankruptcy Court in the U.S.).  It is necessary to establish an account for billing purposes using a credit card.  An access fee of $.08 per page applies to all searches conducted.  Beyond bankruptcy case information, this service also allows access to the records of the United States Court of Appeals and United States District Courts in each state so that you can view the pleadings filed in any litigation matter pending in federal court.  While not all federal courts have reached the point where every filed pleading is available for viewing on-line, most courts have and the rest are sure to catch up soon.

Another, non-internet based resource for free bankruptcy case information is the Voice Case Information Service (VCIS).  This is an automated computer system that provides basic bankruptcy case information, searchable by debtor’s name, social security or case number.  One easy way to find the VCIS number for the court where your customer might have filed is by accessing the website for that jurisdiction’s bankruptcy court.  For example, the website for the United States Bankruptcy Court for the Eastern District of North Carolina, http://www.nceb.uscourts.gov/clerkoff.htm, provides the following VCIS numbers for cases pending in their jurisdiction:  Wilson (252) 234-7655 or (888) 513-9765; Raleigh (919) 856-4618 or (888) 847-9138.  An unofficial website for “Spies Online” purports to list the VCIS numbers for every court: http://www.spiesonline.net/bankruptcy.shtml.

If you have any questions regarding this article, please contact Lisa Sumner at 919.783.2869 or lsumner@poynerspruill.com. 

This electronic publication is published by Poyner & Spruill LLP to provide general information about significant legal developments. Because the facts in each situation vary, the legal precedents noted herein may not be applicable to individual circumstances.