What Happens At My Chapter 7 Bankruptcy Hearing
Every person who files a Chapter 7 bankruptcy must attend a “hearing” within 21-45 days. Although the hearing requires you to testify under oath, while being recorded, it is more of a meeting than a hearing. Usually, the only people participating at this “meeting of creditors” will be you , your attorney, and the trustee that has been assigned to your case.
- What is the Purpose of the Bankruptcy Hearing?
The general purpose of the bankruptcy hearing is to have the debtor testify, under oath, about the accuracy of the bankruptcy petition and schedules that were filed in the case.
- Will a Judge Ask me Questions?
No, there will be no judge at your hearing only a “bankruptcy trustee”. The trustee is a lawyer representing the Court. It is his/her job to determine whether you have any assets that may be claimed for a distribution to creditors. The bankruptcy trustee also wants to make sure you did not try to hide assets or give property away to someone, just before filing bankruptcy.
- Will Creditors Attend my Hearing?
- How Long will my Bankruptcy Hearing Take?
In most cases, the debtor answers questions for about 5 minutes. Usually, the trustee will conduct 6 to 8 hearings every half hour.
- Will I Lose my Right to File Bankruptcy at the Hearing?
- What is the Step-by-Step Procedure at the Hearing?
- What Else do I Need to Know?
What If The Trustee Didnt Say Anything Like That
In some cases, the trustee wonât yet know whether theyâll be treating your case as a no-asset case at your creditorsâ meeting. If the trustee asked for more documents or another meeting was scheduled, youâll need to provide the trustee the documents they requested and attend the meeting unless you receive confirmation that the meeting was canceled.
Otherwise, they will still conclude the meeting but they will not be filing a report of no distribution with the court. Instead, theyâll continue working on your case until they know which way to go with it.
If the trustee determines at any point after your 341 meeting that you donât have any unprotected property that they could use to pay your creditors, theyâll file the âno distributionâ report with the court. If your discharge has already been granted when that happens, the only thing left in the case is for the court to close it.
How 341 Meetings Work
The 341 meeting is one of many stages involved in declaring bankruptcy in the United States. Its primary purpose is to establish the facts of the bankruptcy in question, and to ensure that all the paperwork necessary to carry out the bankruptcy proceedings are in order. Although the attorneys of the debtor and creditor are welcome to attend, the only parties whose presence at the 341 meeting is legally required are the debtor in question and the court-appointed trustee.
Prior to the 341 meeting, the trustee would have already reviewed the bankruptcy paperwork and financial records submitted by the debtor. The purpose of the 341 meeting, therefore, is principally for the trustee to confirm the facts stated by the debtor and to collect any additional paperwork that may be required. In the event that the debtor is attempting bankruptcy fraud, this would likely be detected by the trustee during or prior to the 341 meeting.
Typically, discussion at 341 meetings will center on how the debtor plans to eventually repay their obligations.
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What Does The Trustee Do After My 341 Meeting
That depends on whether you have any nonexempt property. If your trustee told you that you have a no-asset case at the end of your 341 meeting, the trustee is almost done. The only thing left for them to do is to file their Report of No Distribution.
The Report of No Distribution lets the court know that that trustee is done with your case. If the trustee files it before your discharge is entered, the court will close your case shortly after sending you the discharge order.
Unfortunately, the court doesnât send out official notices when a case is closed. If youâre not sure if your case is still open after getting your discharge and the trusteeâs report, call the clerkâs office at the bankruptcy court where you filed your case to ask.
What Happens At A Meeting Of Creditors
The meeting of creditors is usually held at your trustees office but can be held at another location. The trustee attends to provide information regarding the administration of the estate. If attending the Official Receiver acts as chairman otherwise he will assign his duties to the trustee.
Before the meeting, your trustee will prepare a preliminary report about your assets and liabilities, the causes of your bankruptcy, estimated realizations and details of any reviewable transactions. This report will be presented to the creditors by the trustee.
As the bankrupt, you are required to attend and answer questions truthfully. Failure to attend the meeting, without a valid reason such as sickness, is an offense under the Act and can impact your bankruptcy discharge. You can request not to answer questions or provide information that does not bear on your bankruptcy filing.
If you are required to provide further documentation your trustee will advise you before the meeting and can adjourn the meeting for another date if needed.
In a consumer proposal, the meeting of creditors is where the creditors have an opportunity to vote to accept or reject your proposal terms. If no meeting is required, the proposal is automatically approved. Learn more about how voting on a consumer proposal works.
Most examinations of our clients fall under the randomly selected reason, almost always due to VERY high debt and result in no further investigation or actions.
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The Length Of The 341 Hearing
You’ll be one of about ten debtors set for the scheduled hour. Once the bankruptcy trustee calls your case, things move quickly. The bankruptcy trustee will ask a series of routine questions and inquire about any issues or matters needing more explanation. A creditor’s questions can be short, as well. If they aren’t, the trustee will usually continue the debtor’s meeting for another time to allow further questioning . In most cases, the hearing ends after ten minutes or less.
You Must Attend The Meeting Of Creditors
The meeting of creditors is the only mandatory appearance that most parties must make after filing bankruptcy. The 341 meeting must be attended when scheduled, and both spouses must appear if the bankruptcy is a joint case.
There will be several weeks of advance notice, so make arrangements to attend, and plan to be there with your bankruptcy attorney a few minutes early. At the meeting room, there will be an information sheet from the trustee that you must read. Be prepared to confirm that youve reviewed that information.
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What Happens At The Meeting
The trustee examines your proof of identity and social security number, first. Forget those essential items, and youll probably have to come back.
The trustee swears you in and begins his questioning. I have some tips for answering the trustees questions. The meeting is either tape recorded or recorded by a court reporter.
Standard questions asked by the trustee at the 341 meeting include:
- Did you read the schedules before signing?
- Did you list all of your assets?
- Did you list all of your debts?
- Are the schedules accurate?
- Do you want to make any corrections to the schedules?
- Have you lived in this state for the past two years?
- Do you owe anyone domestic support?
- Are your cars insured?
- Have you destroyed your credit cards?
The trustee may also ask how you reached the values on your assets and for more information about unusual assets or business interests.
If the trustee needs more information or documents that arent available at the meeting, the meeting may be continued until another date when the information can be provided and any questions answered.
When Does A Bankruptcy Trustee File A Statement Of Presumed Abuse
The United States Trustee trustee has ten days to file a statement of presumed abuse. That would happen if he disagreed with the way I filled out your budgetsand they think you have too much money left over to be allowed to file Chapter 7. If nobody showed up from their office to challenge me at your hearing, we expect this deadline to pass by.
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Concluding The Meeting Of Creditors
The bankruptcy trustee will conclude the meeting after asking questions if no further information or documentation is required from you. If the trustee concludes your hearing, you don’t have to come to another hearing. You’ll receive your discharge after meeting all other requirements.
However, if the trustee requires further informationor wants to give a creditor additional time to examine youthe trustee will usually set another hearing date to allow you time. If all that is required is additional documentation, the trustee might take the continued meeting off the calendar if you provide the information promptly . But, if the trustee has more questions, you’ll have to go to the next hearing.
Youll Need To Verify Your Identity
Every bankruptcy attorney and trustee has their stories about mistaken identities, and the issues that follow. Although the bankruptcy system is built on trust, it is also built on verification. The trustee is required to verify your identity.
Bring photo identification, and a document showing your social security number such as your social security card, or a pay stub.
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Do I Need To Complete All The Required Courses Prior To The 341 Meeting
There are two courses for consumer filers. The first is a pre-filing class that has to be completed before your bankruptcy is even filed. Secondly, there is also a post-filing class, which does not have to be completed before the 341 meeting, but it should be completed promptly after your bankruptcy has been filed.
If You Need An Interpreter Service
Interpreter services should be available, but itâs important that you contact the trustee well in advance of the meeting to inform them that you will require an interpreter. Itâs important to give them a heads up so they can have someone available during your 341 meeting. Follow any instructions provided by your trustee.
If someone in your household is more comfortable speaking English than you are, consider asking them to sit in so they can assist if something goes wrong. Keep in mind that trustees donât normally allow family members to serve as interpreters, so this should be considered a back-up solution only. Make sure you ask the trustee about having your relative assist during the meeting before they say anything.
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In A Chapter 7 Bankruptcy
The main job of a Chapter 7 bankruptcy trustee is to sell your nonexempt property and repay your creditors as quickly as possible.
The Chapter 7 trustee is also required to decide if your nonexempt property can be sold in order to pay back a significant portion of your debt. If so, youll have to turn that property over.
What Happens At The Meeting Of Creditors In Bankruptcy
The meeting of creditors is where the bankruptcy trustee and any interested creditors can ask you questions about your bankruptcy papers and financial affairs while you are under oath. The trustees job is to make sure that you are not abusing the bankruptcy system or lying on your bankruptcy petition.
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Who Will Be Present At The 341 Meeting
The bankruptcy filer would be present and, if they are represented by an attorney, then their attorney would also be present. However, the questions are directed toward the filers, not the attorney. In all instances, the chapter 7 trustee would be present. In some instances, a United States trustee and the creditors would be present as well.
Bankruptcy Timing And The Personal Injury Lawsuit Process
The bankruptcy rules surrounding personal injury lawsuits dont just cover compensation youve already received. They also cover compensation you may be entitled to, even if you havent yet filed a suit. In other words, if youve been injured and have a claim, that claim is part of your bankruptcy estate even if you havent yet filed a suit. You must always list potential claims in your bankruptcy filing papers.
The way the claim proceeds depends on the type of bankruptcy you file. Under Chapter 7, the bankruptcy trustee will decide what to do about your claim. If youre likely to win more than the exempt amount, the trustee will likely take over your case. That means shell choose your attorney, decide how to proceed in the case, and determine whether and when to settle. Then she will pay you the exempt portion of the award and use the rest to pay your creditors.
If the trustee thinks youll win less than the exemption, youll be able to handle your own case. Under Chapter 13, youll be able to handle your own case. If you win compensation, youll need to amend your bankruptcy filing to ensure that your creditors will get as much of the award under your plan as they would under Chapter 7.
If youre unsure of how to proceed, your safest bet is to reach out to one of our attorneys today. Our initial consultations are always free, and wed be happy to help steer you in the right direction.
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Who Is Required To Go To A Meeting Of Creditors
Anyone who has filed for bankruptcy is required to attend the 341 meeting. In joint cases, both spouses must attend. The trustee will ask you to verify your identity and social security number by providing government issued photo identification and a social security card or original copy of a W2 with your social security number on it.
Your bankruptcy lawyer and the appointed trustee will both be present at the hearing. No judge will attend the meeting in fact, most people who file for Chapter 7 bankruptcy never need to go in front of a judge. All of the creditors involved are invited to the meeting, but they rarely attend.
What Happens At A Bankruptcy Meeting Of Creditors
The 341 Meeting is held in a courtroom or meeting room, and administrated by the bankruptcy trustee, outside of the hearing of a judge. What happens in a 341 Meeting begins with your arrival at the federal courthouse or other designated building. Once you arrive, you will check a list for your case caption and/or name. The trustee will call between 10-12 cases within the hour, including yours, from the list. You and your attorney will greet the trustee, sit with the trustee and their assistants, if any, and provide documents to verify your identity.
Next, the trustee will ask questions for about 15 minutes to confirm the veracity of the documents you filed with the court such as your petition and schedules. The trustee will try to see if you have assets that should not be protected by the exemptions available in the State of Texas, and to parse any other potential challenges to granting you your bankruptcy. This will be done through a series of questions asked by the trustee and answered by you under oath.
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What Happens After Meeting With Creditors
A meeting can be concluded when the creditors are agreed not to proceed for the hearing. It is a decision of the creditors who may continue or close the meeting after one hearing. Additionally, the bankruptcy trustee is also pleased to end this process as you have provided all related information and documents. But it does not mean that you are going to be discharged from the bankruptcy case.
However, there is no issue to be happy that you are being discharged from chapter 7. Creditors still may chase you in 60 days from the first date of the meeting and have more objections. But the objection may come and you need to answer their question.
In case there is no objection at the deadline of chapter 7, you have successfully completed all requirements of the bankruptcy discharge. A discharge letter from the court will be sent via mail. Before your discharge, you need to take a financial management course which explains rebuilds your financial recovery.
The Logistics Of The Creditors’ Meeting
Parking around a courthouse or a court facility can be notoriously tricky. It’s a good idea to make plans for parking before the meeting so you can arrive about fifteen minutes early. There might be several trustees holding meetings simultaneously, and the extra time should allow you to find the right room.
You’ll want to look at the calendar posted outside the hearing room door. The trustee will set about ten cases during the same hour, so you’ll want to see where you fall in the order.
A judge won’t be present. The trustee will conduct the hearing. Creditors might attend as well, although in many bankruptcy cases, creditors don’t show up. The trustee will swear you in and ask a series of questions under oath. If satisfied, the trustee will conclude the hearing. Otherwise, the trustee will continue it until another day. A continuance is rare if you’ve produced all required documents on time.
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