Bankruptcy is a legal process so it’s not surprising that many consumers considering filing Chapter 7 or Chapter 13 worry about what will be required of them. First and foremost at the top of the anxiety list for many is one question: Will I have to go to court during my bankruptcy case?
Frankly, it’s not likely that there will be a lot of interaction between you, the filer, and the bankruptcy court during the bankruptcy proceedings. But there are certain court hearings that you must attend and a few other potential appearances that would depend upon your bankruptcy case specifics.
The Meeting of the Creditors is Mandatory for all Filers:
Every bankruptcy case requires that the filer attend the Meeting of the Creditors. This is a meeting at which the bankruptcy trustee assigned to your case and your creditors (any who decide to attend the meeting) are able to ask you questions. It sounds pretty scary, right? The technical description/definition of the Meeting of Creditors sounds a lot scarier than what actually happens in the majority of bankruptcy cases. In more than 90% of bankruptcy cases, the only people that attend the Meeting of the Creditors are: you (the filer), your legal counsel and the bankruptcy trustee. On the rare occasion a creditor might make an appearance, but it doesn’t happen very often.
At the Meeting of the Creditors you will be asked if you have been truthful regarding the disclosure of assets. You’ll also be asked if you signed your bankruptcy documents before they were filed. There will be questions about your residency status, how long you’ve lived in the state, and whether or not you are due to receive an inheritance in the near future. Your bankruptcy trustee could also ask questions about documentation submitted to the court in connection to the bankruptcy. The meeting typically lasts about five minutes and most feel that they were scared for no reason once it’s over.
Reaffirmation Hearing – a Possibility Depending Upon Your Situation:
This hearing is for those who have requested to keep a vehicle they still owe money on even though they are filing for bankruptcy. In this particular situation, filers are required to keep making their monthly payment throughout the entire bankruptcy case. They are also required to sign a reaffirmation agreement. The agreement is a statement that you intend to keep the vehicle specified and that you “reaffirm” the loan that you originally entered into with the lender. The hearing can be held in order for the court to ensure that you understand the process and its implications and what’s in your best interest. If you need to attend this hearing, your bankruptcy attorney will attend with you and it is generally no longer than five minutes.
2004 Examination – a Possibility, but Not Likely:
If the bankruptcy feels that the Meeting of Creditors left issues of the case needing additional clarification, the trustee can set a 2004 Examination. The Meeting of the Creditors is very succinct/time is very limited. If this meeting becomes necessary, it would most likely last less than an hour. It is a second chance and additional time for the bankruptcy trustee to answers regarding questions they have about your case and dig deeper into items of question that they didn’t have time to fully address during the Meeting of Creditors.
Adversary Proceedings – Not Likely:
There are rare cases that will lead to adversarial proceedings. This usually occurs because a creditor claims that a debt should not be eligible for bankruptcy discharge because it was fraudulent. It can also be a result (in extreme cases) of the bankruptcy trustee deciding that a debtor was not compliant with the rules of the court – as a result, the trustee can file an adversary proceeding. It’s very rare.
It’s helpful to have a lawyer by your side to help you navigate the process even if your only court appearance is limited to less than 5 minutes during the Meeting of Creditors. If you need legal counsel for your bankruptcy, contact the southern California bankruptcy law experts at Westgate Law.