What To Expect at My Chapter 7 Bankruptcy Meeting of Creditorsby Chekian Law Office
Okay, so you filed Chapter 7 bankruptcy. You may or may not have a lawyer or law firm representing you. This is usually the first appearance you or your lawyer is required to attend. First of all, this is not a court appearance. There is no judge. Do not feel intimidated. In most cases (unless you are unavoidably out of town, imprisoned or medically unable to attend), you do need to attend personally. You will need to provide proof of your identity, usually government issued picture i.d. such as driver’s license or passport, and proof of your social security number or tax i.d. number, such as a social security card, or recent W-2 or 1099 tax form.
Although the hearing is titled “Meeting of Creditors”, in most cases, only the bankruptcy trustee, you and your lawyer attends this hearing. However, creditors are allowed to attend this hearing and ask limited questions. The questions are limited to asking about your assets and financial situation as disclosed on the bankruptcy petition and schedules. If a more detailed examination is required, creditors have the option of requested a “Rule 2004” examination from the judge assigned to the case, and if granted, an examination is scheduled which proceeds much like a state court deposition, where creditors can ask detailed questions to determine if they will proceed to object to the discharge of debts sought by the debtor in the bankruptcy. This is very rare.
The typical examination of you in an individual Chapter 7 case by the bankruptcy trustee at the Meeting of Creditors is short, about 3 minutes, and limited to about 10-15 questions. Expect basic questions such as: what is your name, did you read your bankruptcy petition and schedules before you signed them, where do you live, are you married, did you list all of your assets and all debts, did you ever file bankruptcy before, did you transfer anything of value out of your name in the last 4 years, did you pay back any debts to any family or friends in the last 4 years.
At the Meeting of Creditors, if your situation is more sophisticated, you may expect further questions. If you have a dba or a closely held business, the trustee will probably ask when you formed the company, what it does, ask if there is existing inventory, receivables and assets. The hearing may be continued to provide additional documents such as business bank account statements and tax returns. If you or your spouse own real estate, the trustee may ask when you bought the real estate, how much you paid for it, and the basis for your valuation of it as listed on your bankruptcy schedules.
Remember, the trustee is not the judge in your case, s/he is only the one appointed to potentially administer (sell and recover) money to pay him/herself, his lawyers and professionals, and pay money to your creditors. In 98% of the cases, the trustee recovers nothing, you as the debtor keep all your assets, and you wipe out all debts as allowable under the Bankruptcy Code. It helps to have a good attorney who properly prepares all your bankruptcy paperwork and protects/exempts all your assets. In the event that the hearing is continued for a further date, if you timely produce the additional information and documents, you will not be required to appear at the continued hearing.
That is it! So don’t feel intimidated, make sure you arrive promptly and are not rushed, bring a copy of the full bankruptcy filing and review it the night before, and bring extra copies of your latest filed federal and state income tax returns just in case the trustee lost the copies which you or your lawyer previously sent to the trustee. Dress however you want to, but be respectful and do common sense things like take off your hat and cover up any tattoos while you are being examined. Do not do anything to upset the trustee or any creditors who may attend. Just get through the hearing and keep your eyes on the prize of your bankruptcy discharge-this is why you filed your bankruptcy case-to get relief from debts which you could not afford to pay.
Many people in California have debt problems. Michael Chekian is a California State Bar Certified Bankruptcy Specialist. Mike runs a full service bankruptcy law firm based in Los Angeles. He and his staff provide friendly, non-judgmental, confidential free consultations. Voice 310 390 5529; email firstname.lastname@example.org.