For many, the filing of a Bankruptcy is the unintended consequence of an unavoidable stressful life event or series of events; the loss of a job, illness, and divorce, for example. The thought of appearing in a courtroom and speaking openly about those problems can add stress to the existing situation!
The majority of Chapter 7 cases don’t require you to set foot in a courtroom.
Take a breath and try to relax. There is good news! The purpose of a Chapter 7 Bankruptcy is to provide you with a fresh start and free you from your financial burdens, not pile-on additional pressure. If you file a Chapter 7 Bankruptcy, you are required to appear at a hearing called the “Meeting of Creditors” also known as the 341 meeting. In New Jersey, this meeting does not take place in a courtroom and a Judge does not attend. The typical individual who files a Chapter 7 will never see the inside of a Bankruptcy Courtroom.
What is the Meeting of Creditors?
The Meeting of Creditors is a recorded question and answer session about your Bankruptcy.
Every individual who files for Bankruptcy must attend. The questions are asked by a Bankruptcy Trustee. The questions are usually very similar to the ones already asked by your Bankruptcy Attorney, and answered by you in your consultation. The primary objective behind the Meeting of Creditors is to get you to confirm, under oath, that the written disclosures provided in your Bankruptcy Petition and Schedules are true and complete.
What is a Bankruptcy Trustee?
If you file under Chapter 7 of the Bankruptcy Code, the Court will randomly appoint a Bankruptcy Trustee to administer your case. In New Jersey, most Trustees are practicing Bankruptcy lawyers who also perform the role of Trustee on a part time basis. One of the Trustee’s responsibilities is to determine what assets you own and whether the Trustee may sell any of these assets with the proceeds used to repay your creditors. This is just one of many reasons you should consult an experienced Bankruptcy Lawyer before you file your Bankruptcy. You should determine if the Trustee might sell any of your assets before you file a Bankruptcy. At the Meeting of Creditors, the Trustee will ask questions designed to make sure you have disclosed all of your assets and accurately disclosed the true state of your financial affairs.
Who Attends the Meeting of Creditors?
If you retain an experienced and competent lawyer, he or she will fully prepare you for the Meeting of Creditors. You should confirm that your lawyer will attend the meeting with you, and will be there by your side. The appointed Bankruptcy Trustee will also be there and will conduct the meeting. The meeting may be attended by any or all of your creditors. In the great majority of cases no creditors appear. Usually, other individuals in the room are other people who filed for Bankruptcy and their lawyers waiting for their meeting to begin. Most people in the room are preoccupied with their own responses; they are not focused on you or your questions and answers with the Trustee, so relax.
How Long Does the Meeting of Creditors Last?
If you are well prepared and have provided the Trustee with all of the documents she has requested before the meeting, the meeting will normally last between 5 and 10 minutes. In many cases, your wait time will be longer than the duration the actual meeting.
What Does the Trustee Ask at the Meeting of Creditors?
The Trustee will ask you to take an oath that the answers you are about to provide are true. It is impossible to anticipate every question the Trustee may ask, since the facts of every case are different and will often guide those questions. Generally speaking, however, there are some basic questions the Trustee will ask in every case.
For example, the Trustee will ask you to confirm that you reviewed and signed the Bankruptcy Petition and Schedules that your attorney filed. She will ask you to confirm that you understood the Bankruptcy Petition and Schedules, and believe them to be accurate. She will ask if you have any changes or amendments to report. She will ask if you have disclosed all of your assets and all of your liabilities. She may ask if you have any claims against anyone for breach of contract, personal injury or anything else. She may ask if anyone owes you any money. She may ask if you have ever owned a home or real property. She may ask if you reviewed the Bankruptcy information statement which explains the differences between chapters 7, 13 and 11.
When Will I be required to Attend the Meeting of Creditors?
The Meeting of Creditors is typically scheduled for approximately 45 days after you file your case.
Why Must I Attend the Meeting of Creditors?
The Bankruptcy Code requires that every individual filing a Bankruptcy attend the Meeting of Creditors. Your appearance is mandatory. Your appearance is a part of an unwritten contract that says you will cooperate with the Bankruptcy Trustee in exchange for a discharge of your debts.
What Must I Bring with Me to the Meeting of Creditors?
The Meeting of Creditors cannot proceed unless and until the Bankruptcy Trustee can satisfy her/himself that you are the person you say you are. A valid photo identification such as an unexpired driver’s license or passport AND proof of your social security number such as your social security card must both be provided at the start of the meeting.
Which Documents Will I have to Provide Before the Meeting of Creditors?
In most cases, the Bankruptcy Trustee will send a letter after the case is filed and before the scheduled Meeting of Creditors. The letter will detail what documents the Trustee will want to review prior to the meeting. Generally, these documents include proof of your income for the 60 days prior to the Bankruptcy filing, such as a pay stub; copies of your last two filed tax returns; and if you own a home, proof of the home’s value and a statement showing the mortgage balance.
The above is for informational purposes only and is not intended to be legal advice nor is it intended to create an attorney client relationship with anyone reviewing this material. There is no substitute for consulting an experienced bankruptcy attorney. The facts of your particular circumstances may lead an attorney to conclude differently than the information provided herein.