The bankruptcy meeting of creditors is a daunting prospect for most debtors.
What questions will they ask me at the court hearing I must attend?
- How long does it last?
- Will the Judge deny my case at the hearing?
- Do I need to attend?
These questions, and many more, seem to be asked by every debtor I meet!
So lets get to the bottom of this and explore the meeting of creditors for debtors in the Southern District of California.
The meeting of creditors, or 341(a) hearing, the technical name of the hearing under the Bankruptcy Code, seems to be the most feared part of Bankruptcy for the majority of the clients that I see. But truth be told, the creditor’s meeting is generally the most non-eventful part of the Bankruptcy Case!
Yes, you must physically attend, unless you qualify under one of the four exceptions: you are dead, you are in prison, you are on military deployment, or you are medically unable. Unless you qualify under one of those exceptions, you will be at the hearing approximately 30 days after the bankruptcy case is filed.
How long does it last? It depends. I’ve seen some last under 30 seconds. Others I’ve seen last over an hour. The majority of cases, about 90%, generally last 2 to 4 minutes each. There are about 12 to 16 cases called each hour, on the hour, generally from 9am to 4pm. Some trustees are quick, some are extremely slow! Regardless which trustee you get, the results seem to be the same. Chapter 7 cases are generally quicker than Chapter 13 cases.
In the Southern District of California Bankruptcy Court, there are 6 Chapter 7 Trustees and 2 Chapter 13 Trustees. There are 2 very fast Chapter 7 Trustees. There is one extremely slow trustee. The other 3 are somewhere in the middle.
There is no judge present at these hearings. That would be unlawful because it is forbidden in the bankruptcy rules. In the old days, the Judges used to conduct these hearings. But with the change of the bankruptcy code decades ago, the Judges were put off limits from these hearings in an effort to separate the administration of the Bankruptcy Estate from the Judicial Powers of the Court.
Supposedly, this would eliminate any bias between Judges and debtors, as well as bring in a whole new party to administer assets: The United States Trustee. It would also elevate the judges to their Judicial Role. Yes, there always seems to be some competition on the Bench between Federal District Court Judges and Bankruptcy Judges, and there is continued debate on whether they are equal.
Regardless, in most cases, you will never see the Judge. Rather, you will meet your case Trustee at the hearing. All the trustees here have financial backgrounds of various degrees. Some are not even attorneys. Many of them also file bankruptcy cases for other debtors as well and sit with their clients before other trustees with all the other attorneys.
Sometimes, the meetings are continued. Generally, your attorney would be able to give you a heads up if you can expect a continuance. The most common reasons for a continued hearing are: a debtor that does not show up or shows up late; the failure to list all assets; the failure to send in supporting documentation to the trustee; the failure to list all creditors; credit card debt over $100,000; and higher than usual income.
So who is present at the hearing and what type of questions do they ask?
Read Part II of this article to find out.
Written by Michael G. Doan
Bankruptcy Law Network (BLN)
Latest posts by Bankruptcy Law Network (BLN) (see all)
- New Judge for Southern District of Texas – David R. Jones - August 19, 2011
- Limited Emergency Efforts to Save Homes Continue - June 30, 2011
- Why Run Your Company Into The Ground? - June 6, 2011
- New U.S. Trustee for Texas – Region 7 - October 2, 2010
- Is Chapter 13 An Option For A Small Corporation Or A Limited Liability Corporation (LLC)? - September 29, 2010
Last modified: March 30, 2012