By Benjamin Mayer, Esq.

McPhail Sanchez, LLC

USFN Member (AL, MS, TN)

A recent change to the search parameters of the Public Access to Court Electronics Records (PACER) service has introduced substantial challenges for law firms nationwide. Any law firm engaged in the practice of mortgage default services, post-foreclosure possession litigation, or any other default-servicing litigation has, no doubt, felt the ripple effect in significant, excessive time and resource expenditures of this, relatively, minimal change.

The PACER service provides electronic access to federal court records. This includes individuals who have filed for bankruptcy in their respective state districts from the moment the case is filed. Timely and accurate bankruptcy searches are of the utmost importance in the world of default servicing. These searches should be performed multiple times throughout the life of the file because actions taken against an individual in an active bankruptcy can lead to severe consequences for the law firm as well as the mortgage servicer and/or lender.   

When an individual (or joint couple) files a Chapter 13 bankruptcy petition, an automatic stay is invoked which halts most collection actions against the debtor or the debtor’s property under 11 U.S.C. § 362. If a borrower files bankruptcy before the date of a foreclosure sale, all foreclosure proceedings must cease, which gives the borrower an opportunity to cure arrears in mortgage payments. If a foreclosure sale takes place while the borrower is in an active bankruptcy, the consequences for violating the automatic stay can be severe, including monetary sanctions, punitive damages, and rescission of the foreclosure sale.

In order to avoid being placed in this precarious situation, law firms will search PACER for active bankruptcies at multiple stages of the foreclosure proceedings. At a minimum, bankruptcy searches are conducted prior to the date of first publication, prior to the date of foreclosure sale, and on the morning of the date of foreclosure sale, which is especially important if a debtor or their attorney does not inform the law firm that the bankruptcy has been filed. A search of the national case locator previously required the debtor’s Social Security number or the debtor’s name, respectively, in order to locate a relevant case.

As of December 8, 2024, PACER initiated a system update requiring both a Social Security number and a last name. A search of a debtor’s Social Security number with an unknown or different last name will not reveal a bankruptcy case in the search results. The additional, mandatory requirement of a debtor’s last name at the time of filing in a national case locator search undermines the confidence in accurate searches. This is because changes in a debtor’s personal life between the date of the mortgage and the date of foreclosure proceedings have the potential to complicate search parameters. In short, Social Security numbers never change, but surnames can and do often change. Marriage and divorce are the obvious reasons for changes in surnames, but even a misplaced hyphen in a search will yield incomplete search results.

While a search of the national PACER case locator requires both a Social Security number and a last name, a PACER search of each state’s respective districts still only requires a Social Security number. Therefore, in order to safely determine if a debtor is in bankruptcy, a national PACER search should be followed by searches in each district of the state in which the subject property rests. If the file indicates that the debtor may have ties to another state, one should err on the side of caution and search each district in said additional state(s) as well.

Needless to say, these compulsory searches require extensive additional resources. Hours of extraneous time searching for potential bankruptcies detract from revenue-generating operations and cost mortgage servicers thousands in additional legal fees. Furthermore, this update to the PACER national case locator greatly enhances the potential for adversarial proceedings against creditors that should, otherwise, be completely avoidable.

While conversations between the law firm of McPhail Sanchez, LLC and administrative staff at the PACER Development Branch have shown that the solution is not as simple as a flip of the switch, it does appear that at the time of writing, the PACER Development Branch is taking measures to restore the previous search capabilities of the national case locator but with additional security features.

As of March 10, 2025, an update from PACER indicates that beginning April 13, 2025, users will again be able to search the national database by Social Security Number without the need for a last name, although the search will now use CAPTCHA technology as an added security measure.

In the interim, multiple searches of the various PACER districts will be required to avoid the potential risk for costly fallout from these changes.  

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USFNews - March 19