Meeting of Creditors

What Happens After The Bankruptcy Meeting of Creditors?

I have discussed the bankruptcy Meeting of Creditors in some previous posts, including it's purposes and procedure. The Meeting of Creditors is very straightforward. The trustee assigned to your case reviews your petition, your income and expenses, and your property and debts. He or she verifies you are being truthful and thorough, and they also recommend (or object to) your case being discharged. But, your case is not quite complete when the Meeting of Creditors is over. There are still a few things to keep in mind.

I will mostly discuss what happens after the Meeting of Creditors in a Chapter 7 case. The Chapter 13 case typically lasts 3 to 5 years, so the time after the meeting is much greater, and the continued case is more complex. A Chapter 13 Meeting of Creditors is more of a beginning to your case than an end. There is still a lot to do.

The Chapter 7 Meeting of Creditors, on the other hand, signifies that your case is almost complete. The Chapter 7 discharge is usually official 60 days after the Meeting of Creditors. While you do not need to do anything yourself to bring about the discharge, you should keep an eye out for the notice in the mail. If you have not received it within 90 days, give your attorney a call. You should keep your discharge notice on file in case a creditor ever attempts to collect in the future. You may also need the notice of discharge in order to get student loan companies to accept your payments after bankruptcy (creditors are not allowed to attempt to collect from you while you are in bankruptcy, and some will want proof). So, keep an eye out for this discharge notice.

A responsibility you will need to remember after the Meeting of Creditors is to complete the second course, also known as the Financial Management Course. My office will order this course for you, but you will need to complete it over the phone or internet within 60 days of the Meeting of Creditors. Your case will be dismissed if you fail to do so, and you will be required to re-file EVERYTHING, with additional legal fees and costs. It's easy enough to complete, so there is no reason to take any chances... get it done as soon as possible. The consequences of not doing it are too great.

One final thing to keep in mind after the Meeting of Creditors is that you must notify your attorney of any inheritances, lawsuits settlements, insurance claims, or lottery winnings in the 6 months after your case is discharged. In some rare situations, creditors can make claims for a piece of this windfall. These situations are rare, but keep your attorney updated.

In every case, you should not transfer any property or take out any loans until your case is discharged. Your creditors will have the option of objecting to your discharge until 60 days after the Meeting of the Creditors, so it is safest to take no actions during this period, at least without consulting your attorney. I always tell my clients not to do anything there were told not to do in the months leading up to bankruptcy. Better safe than sorry.

Contact us if you have any questions about the Meeting of Creditors, or the period afterwards. There isn't much to do, but you should still be vigilant. Your case will almost be complete, there is no reason to needlessly raise an issue.

Getting Ready For The Meeting of Creditors

My clients are often anxious about their bankruptcy Meeting of Creditors. This is understandable, as the process is new and unknown to them. However, a little preparation beforehand can greatly reduce the anxiety by making it clear that the process will go smoothly. What exactly do you need to know about your Meeting of Creditors? Here are some simple tips.

First, you will need to know the location and time of the meeting. This will be mailed to you by the Court, in the form of the Meeting of Creditors Notice. If you do not receive this notice within a few weeks of filing your case, contact your bankruptcy attorney. The location will be determined by your county of residence at the time of filing, and the date is usually 4 to 6 weeks after filing. It is important to schedule appropriately once you receive this date, as you may need to miss work or school, or get a babysitter. You'll have plenty of time to do so, but if you fail to appear twice, your case may be dismissed. Once again, if you have any questions about the location, contact your bankruptcy attorney immediately.

The second thing you will need to be prepared is a government issued photo ID and your original Social Security card. These are used by the Trustee to identify you, and your Meeting of Creditors will not proceed without them. Make sure you put both pieces of information aside, as failure to do so will lead to a rescheduled meeting, which may result in additional legal fees.

You may also want to review the information sheet provided by the US Trustees office before your Meeting of Creditors. You will be asked directly if you have reviewed this sheet. Your bankruptcy attorney should review this information with you before filing, which includes filing requirements and information about the different types of bankruptcy. This information sheet should be available at the meeting location if you have not reviewed it beforehand.

If your case is a Chapter 13 bankruptcy, you should also bring proof that you have begun making payments into your plan. This may include a copy of any money order you mailed in on your own, or a recent pay stubs showing the wage attachment being deducted. This shows the Trustee that you are complying with the terms of your plan, and that granting interim confirmation is reasonable.

Finally, each trustee will ask a set of his or her own questions. You should review these questions with your attorney at least once before your meeting date, and on the day of the meeting. Knowing the questions, and how straightforward they are, should greatly reduce your anxiety over the process. The questions differ slightly from trustee to trustee, but an experienced bankruptcy attorney should know exactly what they will ask. Reviewing these questions once last time may also jog your memory of any errors or omissions, of which the trustee should be made aware. If you review the questions beforehand, nothing should take you by surprise on the day of the meeting.

In summary, preparing for your bankruptcy Meeting of Creditors is simple... know the time, date and location. Be familiar with the questions. Have your ID cards. Contact us with any questions about your bankruptcy Meeting of Creditors. It will go more smoothly than you can imagine.

Why Are There No Creditors At The "Meeting of Creditors"?

The prospect of the Meeting of Creditors causes a lot of anxiety for many of my clients. While this is understandable (the process is new to them), it is unfounded. There is very little to worry about during the Meeting of Creditors as long as you are honest and prepared.

A major cause of anxiety is the belief that your creditors will be present, and will cross-examine and grill you. People picture a courtroom setting with a judge and prosecuting attorney. Given the aggressiveness of collection agencies that have hounded them for months and sometimes years, debtors understandably believe a similar attorney will appear in an attempt to intimidate and belittle them. In reality, nothing could be further from the truth.

First of all, there is no judge and no courtroom. The Meeting of Creditors is conducted in a normal office room, in front of a "trustee", who is an attorney appointed to review the case. While there are bankruptcy judges and courtrooms, these only become necessary in complicated and disputed cases. The Meeting of Creditors is a much less formal affair. The trustee sits in the place of the creditors who are owed money, reviews the filing, and asks the debtor some simple questions. Your attorney will be at your side to assist you.

And this brings me to the point of there being no creditors at the Meeting of Creditors. As crazy as it sounds, there is normally no reason for them to show up. First of all, they would need to either hire and attorney or in-house council to appear, which is costly and time consuming. Given the fact that they have little hope of recovering any money in a Chapter 7 bankruptcy, this would be a waste of money for most creditors.

Second, the trustee acts in their place. If the debtor appears to have assets or income sufficient to pay their creditors, the trustee will take action. The trustee will object to the bankruptcy filing if there is anything improper about it. The trustee receives a cut of the recovery, and would thus be motivated to act on their behalf if something is available. With little in the way of rights, and very little chance of recovery, and the trustee sitting in their place, it is extremely rare when a creditor shows up. 

There is also little reason for the creditors to show up in Chapter 13 cases. Once again, there is a trustee sitting in their place. Also, the amount of money there are to be repaid is determined by the claim they file, not by a personal appearance.

The only situation when creditors may (rarely) appear is when they are "unsophisticated creditors". This means they are not a credit card or finance company. An example would be someone included on a personal loan, or an ex-landlord. These individuals know very little about the process, and when they receive a notice saying their rights may be affected, they will sometimes show up. Even then, not knowing anything about the process, they normally have very little to add.

The prospect of the Meeting of Creditors is daunting to many bankruptcy filers, but it should not be! The process is very straightforward, you will be very well prepared by my office, and most importantly, you creditors will likely not be at the meeting of their very name!

Contact us if you have any questions about the Meeting of Creditors in particular, or the bankruptcy process in general.

What Will I Need to Know for My Meeting of Creditors?

The Meeting of Creditors is a required step in the bankruptcy process. At this meeting, a Trustee assigned to your case will review your petition and ask you a series of questions relevant to your case. It can be very stressful for bankruptcy filers. But, it shouldn't be. As your attorney, I will review the entire process with you beforehand and make sure you are completely prepared. Here are a few things that will be helpful to know.

One of the primary purposes of the Meeting of Creditors is to determine if you have any property that can be used to pay your creditors. This information should be provided in you bankruptcy petition, as a list of your property in Schedules A and B. The Trustee will verify this information under the penalty of perjury (this means if you lie, you could be arrested!) The most important piece of property the Trustee will want to know about is your home, if you have one. Therefore, it is important to know the value of your home, and how you came to the amount with your bankruptcy attorney. Typically, this will be determined by comparable homes in the neighborhood, or an appraisal. In either case, you will want to be knowledgeable about the value when testifying at your meeting of creditors.

The Trustee may also ask about other pieces of valuable property, such as a car you own outright, valuable collectibles and jewelry, or large deposits of cash. You will have discussed this with your attorney while filing the petition, but it will be helpful to review the values and how they were determined. For instance, Kelly Blue Book values are used for cars. Valuable collectibles may be appraised by a professional. Whatever the case, you will not be left unprepared by my office.

You will also want to be knowledgeable about your bankruptcy petition. You will be asked by the Trustee if you read your petition, if you signed it, and if you are familiar with the contents. You will not be expected to know every small detail in its exact amount. And you certainly are not expected to know bankruptcy law. But, you should know some important general information. You should know about your debts (who you owe, and how much) and your assets (your property). You should also be familiar with your income and expenses. Once again, you don't need to remember the exact amount you owe to Visa, or the exact amount you spend on your light bill. But, you should know the overall picture.

Since the Trustee is interested in your property, you should also be aware of any property you expect to receive, such as a tax refund, a lawsuit, or an insurance claim. Of course, your attorney should be made aware of such property before filing. But, you will need to be prepared to explain what you are expecting to receive to the Trustee.

The Trustee will also ask your reason for filing, but don't worry, there isn't really a wrong answer. The question is only asked for survey purposes, and a short answer such as "overspending" or "loss of income" should suffice.

If a detail slips your mind, the Trustee will let you review your petition, but it always looks better if you don't need to!

An experienced bankruptcy attorney such as myself will know the exact questions a specific Trustee will ask in each case. I will spend some time before your hearing to make sure you are prepared. While it is important to be thorough and honest at this hearing, you should not be stressed about it. Your creditors are very unlikely to participate. The Trustee is not looking to trick or embarrass you. You will be prepared, and there is nothing to lose sleep over.

If you have any questions about the meeting of creditors, contact us and I will be happy to address your fears.

Some Common Questions About the Meeting of Creditors

What do I need to bring?

You will always need to bring your Social Security card and a valid, government-issued photo ID. If you can't find your Social Security card, you can bring an original W2, but not a copy. The Trustee will not hold your meeting without these, so don't forget!

Where are the Meeting of Creditors held?

For Chapter 7 cases in Allegheny County, the meeting will be held on the 7th floor of the Liberty Center in downtown Pittsburgh. 1001 Liberty Avenue, Pittsburgh, PA 15222. For Chapter 7 cases outside Allegheny County, the locations differ. Make sure to verify with your attorney before the meeting.

Chapter 13 Meeting of Creditors are held downtown in the US Steel Building, 32nd floor. 600 Grant St., Pittsburgh, PA 15219.

What should I wear?

There are no formal requirements, but you should at least dress in business casual. No Steelers jerseys!

Am I going in front of a judge? Is this in a court room?

Nope, you will go in front of a trustee, who is an attorney who reviews your case and asks you some simple questions about your filing. The meeting is held in a conference room, not a court room. Don't imagine this as a courtroom drama right out of a television show. It is a simple, straightforward affair.

Will my creditors be there to ask me questions?

Very rarely. The trustee sits in their place. It is rarely worth the creditors effort to attend, as there is very little they can do if your case is properly filed. If they do show up in a Chapter 13, it is usually to make sure there claim is being allowed (claims are what the creditors say you owe).

 

I will review the questions asked by the trustee several days before the Meeting of Creditors. While this meeting is fairly informal and should not cause anxiety, it is a hearing held under oath. I always tell my clients, as long as you tell the truth and don't hide anything from the trustee, there is nothing to worry about! The meeting is mostly a review of what you have already confirmed and filed, so there shouldn't be any surprises as long as you have been thorough.

Contact us if you have any questions about your Meeting of Creditors.