Bankruptcy and The Meeting of Creditors
Contrary to what some might assume, filing for bankruptcy is not something that can be “deemed.” In other words, you cannot proclaim that you are bankrupt and expect the bankruptcy court to follow along with your wishes. There is a deliberate process involved and those wishing to file for bankruptcy will need to follow along with the appropriate established steps for doing so.
One such step is what is commonly known as a meeting of the creditors and it is definitely something a party to bankruptcy should discuss with a qualified bankruptcy attorney. For those curious about a general overview of what this process entails, here is an explanation of what a meeting of the creditors is:
When you file for bankruptcy under the heading of Chapter 7 or Chapter 13, the court clerk will set up a date for what is known as a meeting of creditors. Such a meeting is also dubbed a “341(a)” which is a reference to the legal statute it falls under. This meeting is a mandatory one as this will be a meeting where you and your bankruptcy attorney will have to answer a series of questions put forth by the assigned trustee. This will be done to find out if you have any assets that you did not declare during your bankruptcy filing. The trustee will also seek to determine whether or not you have made any changes to your bankruptcy schedule or whether you have transferred property prior or after the bankruptcy.
Also at the meeting, the creditors you owe may be present and will inquire about your assets and/or you ability repay any of your debts. This is not always the case because the creditors likely realize if you are filing bankruptcy and are not unwisely attempting to defraud the court, there is little to gain from questioning you. Yet, there will be rare instances where a creditor may wish to appear and ask questions since this is well in their legal rights.
The meeting will be a relatively short one and may last a half hour at the most. However, this is a serious meeting and making any false statements could lead to severe legal judgments. Hence, it is extremely wise that you have a bankruptcy attorney present to handle the question and answer sessions so you are treated fairly and that you also do not mistakenly say or do anything that might harm you.
The end result of the meeting will generally feature the trustee making a statement regarding whether or not you have assets outside of the bankruptcy. Obviously, these would be real assets in your name and not assets the trustee can just “make up” out of thin air.
The meeting of the creditors is more than just a mere formality. It is intended to determine whether or not have purposely or inadvertently failed to mention assets in your possession. As long as you and your bankruptcy attorney are honest in this process, the odds of anything problematic deriving from the meeting of the creditors will be next to impossible.