After your bankruptcy case is filed with the Arizona bankruptcy court the clerk of the bankruptcy court will send out written notification of your bankruptcy to all of your creditors that were provided in the bankruptcy documents. This will not only let your creditors know that they can no longer continue to try and collect on the debt, but also that there will be a meeting held where they can come and ask you questions if they so choose.
This meeting is called the Meeting of Creditors or sometimes referred to as a “341” meeting because it authorized by section 341 of the Bankruptcy Code.
Assignment of a Bankruptcy Trustee
Once your case is filed in Arizona it will be assigned a trustee. The bankruptcy trustee’s job is to administer your case. In Arizona there are twenty-one (21) chapter 7 trustees and three (3) chapter 13 trustees. The trustees are assigned randomly based upon when you file your case.
In a chapter 7 bankruptcy the trustee will review the bankruptcy petition and schedules that were filed with the court and determine if there are any assets that can be seized and sold and then send the money to your creditors. In a chapter 13 case the bankruptcy trustee will also review your bankruptcy petition and schedules but will also review your chapter 13 plan and determine if you have proposed a payment plan that complies with the Bankruptcy Code. The chapter 13 trustee will also accept your monthly payments and distribute the money to your creditors.
In both chapter 7 and chapter 13 cases soon after the case is initially filed the trustee will send out a brief questionnaire as well as a request for certain documents – typically a tax return, pay stubs, and a few bank statements. The trustee will have you put these documents together and send them directly to the trustee’s office.
The reason for this request is to assist the trustee is administering your case and to confirm that the information you have in your bankruptcy petition and schedules matches up with the documents you will be sending in.
The Bankruptcy Meeting of Creditors
Where Will My Meeting be Held?
About 4-5 weeks after your bankruptcy is filed you will be required to attend the Meeting of Creditors.
If you live in Maricopa County the Meeting of Creditors will be held at the bankruptcy court located in downtown Phoenix.
If you live in Pinal County the Meeting of Creditors will be held at the court complex located in Florence.
If you live in Coconino County or Navajo County your Meeting of Creditors will be held in Flagstaff at the federal court house.
If you live in Pima County your Meeting of Creditors will be held in Tucson at the bankruptcy court.
The purpose of the Meeting of Creditors is two-fold: first, the bankruptcy trustee is required to ask you certain questions and confirm your identity. You will be required to show government issued photo ID as well as proof of your social security number (usually with your social security card). Second, the trustee will see if there are any creditors there who wish to ask you questions.
What Questions Will I Be Asked by the Trustee?
After you confirm your identity to the trustee you will then be put under oath and the trustee will ask you questions. Typically you will be asked questions as follows:
What is your name?
Have you lived in Arizona for more than 2 years?
Have you ever filed bankruptcy before?
Have you listed all your debts in your bankruptcy documents?
Have you listed all your assets in your bankruptcy documents?
Do you expect to receive an inheritance anytime soon?
Have you given or transferred anything away in the last two years to a family member or friend?
Then, if the trustee has any specific questions about your case they will bring them up at that time. These questions are usually centered assets that you have, your debts, or if there have been any transfers of assets out of your time in the recent past.
Questions you will not be asked by the trustee include “why are you filing for bankruptcy” or questions about your spending habits or budgeting.
Will Creditors Really Appear and Ask Me Questions?
Once the trustee is completed with her questions she will open it up to any creditors that have appeared and with to ask you questions. Creditors rarely appear. In fact, it happens so rarely that it is actually somewhat surprising when it does happen. I have filed over 1,000 bankruptcy cases and I can literally count on one hand how many times a creditor has appeared.
If a creditor did appear they are limited by time as to what they can ask you. Most Meetings of Creditors last about 5 minutes. The trustee typically schedules 4-6 cases every 30 minutes. If a creditor wants to ask you any questions beyond just a few minutes the trustee will often tell them that they will need to set up a deposition (called a 2004 exam) where they can have more time to ask you questions (this also rarely happens).
The Meeting of Creditors is something that everyone has anxiety about however it is usually quick and fairly painless. Before the Meeting of Creditors occurs I speak with all clients so that they know exactly what to expect from the meeting and what types of questions they need to be prepared for.
If the trustee needs additional documents your attorney is keeping notes and they usually need to be provided within ten (10) days from the day of your meeting.
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Why Would a Second Meeting of Creditors be Set?
It is important to understand that if you show up to your scheduled Meeting of Creditors without your photo ID or proof of social security card that the trustee will likely reschedule your meeting for a different day when you can bring the required identification. This will delay your case by at least a month.
Likewise, if you don’t timely return the documents that the trustee requested a few weeks after you case was filed then your Meeting of Creditors will likely be continued until a later date – and if the documents aren’t provided soon the trustee may seek to have your bankruptcy case dismissed.
Don’t Stress Out About the Meeting of Creditors
Your take away from this article should be that the Meeting of Creditors, while required and important, is not something that you should lose much sleep over. The typical hearing at the meeting of creditors last 5 minutes or less. After the Meeting of Creditors is over your case is on the downhill side of things. In the next installment we will discuss what to expect prior to the entry of the bankruptcy discharge.