If you are deeply in debt and thinking about filing for Chapter 7 bankruptcy, you may have some anxiety over the possibility of having to actually go to court. In practice, however, most Chapter 7 bankruptcy cases do not require the debtor to personally appear before a judge. Instead, the debtor’s only obligation will be to participate in a “meeting of creditors.”
What Is a Meeting of Creditors?
Also known as a 341 hearing, the meeting of creditors allows your creditors–the people to whom you owe money–an opportunity to question you under oath about your bankruptcy petition. This is not a hearing in the sense of a trial. It is more akin to a civil deposition. There is no judge present. Instead, the person overseeing the hearing is a court-appointed bankruptcy trustee.
The trustee is responsible for overseeing your bankruptcy estate, which consists of any property you have that is not expressly exempt from creditor collection. In many Chapter 7 cases, there is no non-exempt property, and therefore no bankruptcy estate. But if there is a bankruptcy estate, the trustee is obligated to liquidate that property and use the proceeds to pay back your creditors as much as possible.
When Does the Meeting of Creditors Take Place?
After you file a Chapter 7 petition, the bankruptcy court will send you a notice telling you the date, time, and place for your meeting of creditors. The meeting is normally scheduled between 21 and 40 days after the date you filed your petition. It is not uncommon for the court to schedule multiple 341 hearings for the same time, so you may find there are other debtors present and waiting to have their own cases heard.
What Happens at the Meeting of the Creditors?
As explained above, the bankruptcy trustee presides over the meeting. All of your creditors must be notified of the meeting and given the opportunity to send a representative. In practice, few creditors show. In particular, unsecured creditors like credit card companies know they stand to take away little, if anything, from a Chapter 7 case, so it is not worth it for them to pay a lawyer to attend the meeting.
Even if none of your creditors show, however, you will still face questioning from the bankruptcy trustee. Most of these questions are boilerplate. The trustee will want to make sure that the contents of your bankruptcy petition are truthful–i.e., that you listed all of your assets and debts–and give you an opportunity to present any additional documentation or evidence that might be useful to your case. If any creditors do appear, they may also ask you questions, which you must answer under oath.
What if I Fail to Attend the Meeting?
Attendance at the meeting of creditors is mandatory. Failure to attend is grounds for dismissing your Chapter 7 petition. If, for any reason, you are unable to appear at the designated time and place, you need to notify the trustee right away. If you have good cause, the trustee can agree to reschedule the meeting. And even if your case is dismissed for failure to attend, you typically can refile your petition and begin the process again.
Is the Meeting of Creditors the Only Required In-Court Appearance?
In most cases, yes. The trustee will end the hearing and report back to the judge. You will not have to return to court personally. Sometimes the trustee will schedule an additional hearing if you need to provide more information or if a particular creditor wants to conduct further examination.
Can I Have a Lawyer Present?
Yes, you are entitled to have a lawyer with you at any meeting of creditors. It is, in fact, generally in your best interest to work with a qualified Council Bluffs, Iowa, bankruptcy lawyer throughout the Chapter 7 process. If you need legal advice or representation in a bankruptcy matter, contact the Telpner Peterson Law Firm, LLP, today to schedule a consultation.