Wednesday, July 08, 2009

Preparing For Your Meeting of Creditors

After a consumer debtor files for Chapter 7 bankruptcy, the court's computer will assign a hearing date for a Meeting of Creditors as required under Section 341 of the Bankruptcy Court. The trustee assigned to the debtor's case is responsible for reviewing the debtor's bankruptcy papers and selling off the debtor's non-exempt assets to pay creditors. Although most of these hearing are fairly routine, some of my clients become very anxious over what might happen to them at the hearing.

The Office of the United States Trustee has produced this helpful video that shows how a Meeting of Creditors usually works:

I advise my clients to review their bankruptcy petition again prior to the Meeting of Creditors. I also give my clients the following grounds rules, courtesy of my colleague Frederick Clement:

Be sure you understand the question before answering it. If there is anything about the question you don't understand, ask for clarification, instead of answering. But always be sure you understand the question you are being asked.

Never guess at an answer. You swear an oath to tell the truth and guessing isn't telling the truth. By guessing, you are not helping anybody understand what really happened. There are things witnesses know and things they think they know. "Know" generally means you learn it with one of your five senses. Otherwise you probably don't "know" it in the legal sense. So be sure not to guess.

Never volunteer information. The shortest truthful and complete answer is always the best. Where possible, truthful and complete, "yes" and "no" answers are best. If the clarification is required with a "yes" or "no" answer, make it very short. Volunteering information never helps you, it only hurts you.

Here are some of the common questions a trustee might ask at a Meeting of Creditors:
  1. State your Name and Address for the Record
  2. Did read your bankruptcy papers before you signed them?
  3. Did you read and sign the meeting questionnaire?
  4. Did you understand the questionnaire?
  5. Did you list all your assets?
  6. Did you list all you debts?
  7. Did you list all your income?
  8. Is there any reason to make any changes to your schedules?
  9. Have you transferred any property or money to any family members in the last year?
  10. Are there any creditors present?
The trustee might ask other specific questions that may be unique to your case. If your meeting is concluded, you will have no other obligations beyond completing the course in debtor education and any other instructions the trustee may give at the meeting.

And there is one final thing to remember: try to relax. The trustee is not a judge and knows that you are nervous just like the other debtors who also have to be there for a meeting of creditors. Your attorney will have the file and be able to assist you if any problems arise.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

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