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What happens at your Meeting of Creditors?

Once you file a chapter 7 or 13 consumer bankruptcy case, the court will schedule your Section 341 Meeting of Creditors. In most cases, this will be the only time you actually have to attend a court procedure. The good news is that this does not take place in a court room, but rather is much more relaxed, as it is a meeting in a conference room. I have found as a bankruptcy attorney, that my clients tend to get very nervous with the prospect of going to court, and when they find out the meeting is not in that traditional setting, their anxiety is reduced a bit.

The Meeting of Creditors is really an opportunity for the bankruptcy trustee to ask a few questions to ensure everything on your petition is accurate and that you have disclosed all of your assets and liabilities. Additionally, this gives your creditors a chance to come and ask questions about your debts. However, very rarely does a creditor actually attend. Typically, they will only attend if they believe you obtained the loan or credit line from them through fraudulent means or by making misrepresentations of your income and ability to pay back the debt. The other time a creditor will attend the meeting is if you have not filed your taxes. The IRS and state Department of Revenue will sometimes ask when you will file your taxes. It should be noted, of course, that filing all taxes is a prerequisite to obtaining a bankruptcy discharge.

The meeting itself is usually pretty quick, generally lasting anywhere from one to five minutes. Typically it starts with providing the Trustee your driver’s license and social security card, and being sworn to testify truthfully. The Trustee will then show you a document you signed, and ask if that is your signature, if you have read and reviewed everything, and if everything on your schedules and statements is true and accurate. Next, you will be asked to explain how you got into financial difficulty and then the Trustee may ask a few questions just confirming information on your schedules, such as whether you have the right to sue anyone, or if anyone ones you money. Presuming you have no assets the Trustee can liquidate, and that prior to the hearing you have sent over your last few paystubs and tax returns, the Trustee will conclude the meeting, and you will be on your way.

The foregoing article was drafted by Attorney Michael Goldstein, a Consumer Debt bankruptcy attorney.