Don't Be Intimidated By the Meeting of Creditors

One aspect of bankruptcy you don't hear much about is what happens after you file. One of the steps that tends to be a little disconcerting for those who have just filed Chapter 7 or Chapter 13 is the "Meeting of Creditors." It just sounds so intimidating, doesn't it?

Truthfully, it isn't.

Meetings of creditors take place a few weeks after your attorney has filed your case and you have provided him or her with your most recent income information and list of debts. The meeting is essentially an opportunity for every one with an interest to hear your case and accept or challenge its terms.

The meeting of the creditors rarely even justifies its namesake because it is highly unusual that a creditor actually attends. What does happen usually takes only a few minutes and sometimes less. At the meeting, you will be sworn in by the trustee and have your identity verified. You will then be asked, under oath, whether the petition you have filed is a true and correct statement of your financial affairs.

The questions you might face are pretty easy to handle and should not cause you to be nervous. For example, "Why are you filing bankruptcy?" is pretty common. Your reason for filing will probably need to be flushed out in some detail but obviously, that's not anything you need to study for because anyone who has gone through the financial stress and frustration prior to bankruptcy knows full well the reasons why. You will also probably hear some questions about employment and real estate, too. But again, nothing overly complicated.

There are rare occasions when a creditor might appear at a Meeting of Creditors. This often happens when there is a domestic support obligation involved, or some other obligation between you and another individual party. If a creditor does appear, they will be given a limited time to ask questions. If it appears that the creditor will need more time to ask questions, the Trustee may ask the creditor to make a formal request for a separate hearing to continue the inquiry. Don't let this scare you. These extra hearings are extremely rare, and, as long as you have been honest throughout the process, you shouldn't have any problems answering the questions.

You may also see a creditor if you ran your own business. This is because there is typically a great deal more money involved with a business than an individual. And, business creditors are more bankruptcy-savvy and thus feel comfortable being involved with every step of the process. Again, your honesty with schedules and asset listings will determine how easy a time you have at the meeting.

This post should give you a decent overview of the Meeting of Creditors but be sure to discuss it with one of our attorneys as you begin the bankruptcy process. Again, the more you know about the process, the more comfortable you will be throughout your journey into & out of bankruptcy.