What Happens at the Chapter 7 Court Date?

Shortly after your Chapter 7 bankruptcy case is filed, the Clerk of the U.S. Bankruptcy Court will send notice of your filing to all parties and creditors listed on your bankruptcy petition. The clerk will also assign a Chapter 7 bankruptcy trustee and set a date for your Section 341 meeting of creditors. There are several reasons for the Section 341 meeting of creditors. 1. The meeting is required in the bankruptcy code. You must be examined under oath with regard to the information contained in your schedules to be eligible to receive a discharge. 2. It gives creditors an opportunity to ask questions of you with regard to the information listed in your petition and schedules; 3. It allows the trustee to take sworn testimony from you with regard to the information contained in the petition and schedules. A trustee will ask you additional questions with regard to your assets, liabilities, income, expenses and statement of financial affairs.

How long will the meeting take?

The meeting can take five minutes or the meeting can take thirty minutes or longer. The meeting can also be continued over to another date if the trustee requires additional information for you to provide.

You should be prepared prior to the meeting with the types of questions that are going to be asked by the trustee. In some jurisdictions, the trustees are required to ask identical questions of each debtor. In other jurisdictions, the trustees are given greater latitude to ask questions of their choosing. In either case, the questions are typically straightforward. They are not designed to trick you into saying something that is not true. They are more or less fact-finding questions so the trustee can determine whether or not there are any assets that can be administered in your case. The overwhelming majority of Chapter 7 bankruptcy cases do not involve the administration of an asset. An exception to this occurs when you either understate the value of your property or you fail to disclose an item that has value beyond what the exemptions can protect.

Who appears at the meeting of creditors?

In most cases, the only three people who will be present at your meeting of creditors are you, your attorney and the Chapter 7 bankruptcy trustee. The most common creditors such as credit card issuers, medical providers and unsecured loan companies rarely if ever appear at the meeting of creditors. Every once and a while an uncommon creditor will appear such as a former friend or enemy that is owed money. Most of the time, these people do not realize that there is nothing to gain by attending. They read the notice that they received about your bankruptcy case and assume that they need to be present. In reality, they are usually wasting their time since in the majority of cases; there are no assets available for creditors.

In some cases, especially if the amount of debt is excessive, a representative from the U.S. Trustee's office may sit in on the case and monitor the answers given by you. The U.S. Trustee's office has a separate and distinct function, which I will detail later in this writing. For now, lets suffice to say that the U.S. Trustee's office oversees the complete process of the bankruptcy case and the process of receiving a discharge in that bankruptcy case.

A secured creditor, such as an auto finance company, may appear through one of its representatives. That person may be tendering a reaffirmation agreement for you to sign. If that is the case, your attorney will check the agreement and ask you if it is something that you are interested in signing. In smaller jurisdictions, most agreements are mailed to your attorney prior to the meeting of creditors.