What happens at the Meeting of Creditors?

by Richard S. Feinsilver on January 31, 2010

Section 341 of the United States Bankruptcy Code provides creditors the right to meet with the debtor to determine if a discharge or a reorganization of debt is appropriate based upon the facts and circumstances presented by a debtor in their bankruptcy petition. While creditors technically have the right to attend these proceedings, and to question the debtor, creditors rarely appear at these proceedings.

In a Chapter 7 bankruptcy case, the Meeting of Creditors serves two important purposes. First, the Court, through examination by the Court appointed Trustee, verifies that all of the representations contained in your bankruptcy petition are true and correct to the best of your belief and knowledge. This is also your opportunity to correct any errors that may exist in your petition and schedules that could impact your testimony, such as changes in employment or income, or the addition of any property or creditors that were inadvertently left off of your schedules. Second, the Bankruptcy Court Trustee also utilizes this meeting to verify on behalf of the Court that there are no assets that maybe considered non-exempt, which could be sold by the Trustee to repay part, or all, of your debt. A typical meeting of creditors in a Chapter 7 case takes approximately 5-10 minutes to complete.

In Chapter 13 bankruptcy case, you are also required to appear before a Court appointed Chapter 13 trustee. In a Chapter 13 case, the Meeting of Creditors serves a slightly different purpose. In addition to verifying that all of the representations in your petition and schedules are true and correct, the Chapter 13 trustee will also verify that you have calculated the means test properly, and that you have the financial ability with which to make the payments proposed in the proposed Chapter 13 plan. Verification of your ability to make payments in a Chapter 13 bankruptcy case is based upon both your testimony at the meeting and various documentation, usually bank statements, tax returns and/or pay statements, that must be presented to the Chapter 13 trustee to verify the representations made in your Chapter 13 petition. As in a Chapter 7 bankruptcy case, a typical meeting of creditors in Chapter 13 bankruptcy case takes between 5-10 minutes to complete.

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