If you are considering bankruptcy and wondering if I have to go to court when filing for bankruptcy, then you have come to to the right place. If you do end up filing for bankruptcy, then you must attend a meeting of creditors with your bankruptcy lawyer if you have one as well as a bankruptcy trustee assigned to your case. If you are a debtor in a bankruptcy case, you can relax as your attorney will tell you, you most likely have nothing to worry about if you have been honest and disclosed all of your assets as you are required to do as part of a bankruptcy filing. Most bankruptcy court meetings will take less than 5 minutes to conduct as long as you have no assets which can be taken by a bankruptcy trustee if you don’t have enough bankruptcy exemptions to protect them. This will be determined by whether you have any assets that are worth more than the allowable bankruptcy exemptions. Usually the meetings are conducted with several other debtors in the room and each person is called up to meet with the bankruptcy trustee one at a time. Therefore, you may be at the court house for over an hour, but your time with the trustee will be limited. Bankruptcy hearings are held in the county in which you lived on the date your bankruptcy case was filed and in most cases there is no getting around your attendance at your 341 meeting of creditors. When the Covid-19 virus broke out, court and bankruptcy procedures shifted to hold all 341 meetings over phone by having all debtors and their attorneys call into a conference line and mute their phones until the applicable case is called. ID’s and applicable documents are provided to bankruptcy trustee’s in advance of the meetings. Currently it has not determined whether the phone hearings will continue into the future or whether bankruptcy 341 meetings will revert back to having to be in person. Most bankruptcy practitioners would agree that having the court meetings on the phone are very convenient and beneficial to all parties to hold efficient meetings for busy attorneys and their clients who often cannot afford to miss work and get stuck in traffic. With that said, the court meetings over the phone can provide unplanned distractions by having everybody on the phone at the same time, such as background noises and there is something to be said about questioning debtors in person and getting facial expression. Perhaps the court would benefit to holding meetings over video conferences such as zoom in order to remedy some of these issues, but that would require all debtors to have access to technology or attending by going to their attorneys office. The court could also allow debtors to attend in person should they choose in case a debtor cannot use technology.
There are only a few situations in which you may want to worry about attending your 341 meeting of creditors. These situations usually involve lying, operating a business, being involved in a divorce or other more complicated matters that involve potential non exempt assets or the chance creditors may show up to your court hearing to ask you about transactions, assets or debts. Typically no creditors aside from the bankruptcy trustee will be asking your questions, but that is not always the case.
1. If you lied on your bankruptcy petition or made other false statements you may be in jeopardy of losing your right to a bankruptcy discharge. The state bankruptcy Trustee and U.S. Trustee handle several cases a year and cases that raise concerns will be scrutinized closely. If you do need to make changes on your bankruptcy petition to fully disclose information that was not disclosed in your initial bankruptcy filing, you should do so in order to protect your bankruptcy discharge. Often times, the 341 meeting of creditors is your last chance to fully disclose information. If a trustee finds out information on their own, then you may be found to have been acting in bad faith or committing fraud which could result in your not getting a bankruptcy discharge which is what you want.
2. If you run your own business you will have to produce proof of income as well as list all business assets and may be questioned about business transaction. In these situations debtor may be trying to discharge a large amount of debt that was personally guaranteed and creditors may be more savvy and comfortable with the bankruptcy process. Additionally, it is more likely that a creditor may show up at your 341 meeting of creditors in order to ask you questions, in addition to the questions of the bankruptcy trustee.
3. If you are involved in a divorce your ex-spouse may want to point out missing information or may own partial ownership of some assets that are available to be sold by a bankruptcy trustee as part of community property that must also need to be disclosed in your bankruptcy. Ex-spouses showing up to bankruptcy 341 meetings of creditors is common, but all they can do is ask you questions at this hearing, but that information may be valuable to a bankruptcy trustee or use to prove cases of fraud.
In most cases creditors do not show up to the meeting but it is always possible. Also people who need translators can slow down the process and cause you to wait longer for your turn in court so all cases are not straightforward.
At the meeting the bankruptcy trustee will verify your identity (driver’s license and social security card or W2), and then they will confirm (under oath) that all of the information provided in the bankruptcy schedules is true and correct, that you listed all of your assets and all of your debts. You may also be asked why you filed for bankruptcy. Depending on the details of your case, you may also be asked additional questions about your property, a business, your job, etc.
If you have additional questions about whether you need to go to court when filing bankruptcy give Symmes Law Group a call today at 206-682-7975 or schedule a free initial bankruptcy consultation online to learn about your options.