Who Will Be At The Bankruptcy Hearing?

19 Aug Who Will Be At The Bankruptcy Hearing?

When someone files bankruptcy they are normally required to appear at a hearing and testify about their case. The hearings is called a “Meeting of Creditors” or a 341 Meeting.

Sounds scary, right? Folks often don’t get help just because they don’t want to go to this hearing. Or they’re afraid of having to testify in public. Sometimes debt collectors talk about this hearing like it’s a visit to a torture chamber, to encourage this fear. But folks should not be afraid. Really!

The misconceptions are so large that many folks later don’t even remember going to court. That’s how boring their hearings were.

First, the judge isn’t even there. She’s not allowed. Next, it usually doesn’t even happen in a courtroom (in my district it’s usually held in a couple of small rooms in the back, around behind the elevators). Even though it’s called a “Meeting of Creditors,” your creditors probably won’t bother coming. Sometimes, even when we want creditors to come to the hearing to work something out, we can’t get them to show up.

In reality, the hearing is mostly a chance for the trustee assigned to your case to verify the information you have provided and find out if anything is missing from the paperwork. Obviously trustees have to be concerned about people deliberately lying or hiding information, assets or income but in most cases the process really boils down to fact-checking. Usually it only takes a few minutes.

And it can still be important, just for that. Every bankruptcy lawyer has been at a Meeting when their client suddenly remembers something they left off the paperwork. It happens.

People are human and they forget things or we don’t ask the question in just the right way to trigger the memory — but the trustee does. That’s OK. A usual question is whether there are any changes that need to be made to the paperwork precisely because there sometimes is a mistake to fix.

The hearing is public. But other than the trustee, lawyers for people scheduled for hearings that day, the folks who filed bankruptcy, and perhaps one or two creditors, who do you imagine would come to these hearings? This is not the O.J. Simpson Trial. Most court proceedings are boring. These are worse than boring usually.

Which creditors might come? In my district in the average case, it boils down to the occasional credit union or local car or home lender who wants to check on whether my client is keeping the collateral and how they are going to pay — or if they’re giving something back, to make arrangements. Sometimes the creditors mistakenly believe they have to come and have no questions. Rarely is it a creditor who is actually upset about something or who has more than a few token questions.

But the other folks will hear what you say! I know. But if you go and listen to cases yourself, you’ll realize you don’t remember or even think much about the other people testifying — you care what the trustee is asking them so you can be prepared yourself.

And, believe me, the trustee wants the hearings to go quickly and smoothly as well. Bankruptcy trustees don’t make more money for being mean to folks and they’re people, usually practicing bankruptcy attorneys, who know what you are going through.

Photo Credit: U.S. Defense Department

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I have been a bankruptcy attorney since 1989. Our firm represents consumers filing bankruptcy almost exclusively, although I have represented bankruptcy trustees as well as creditors. For 2017-2019 I served on the American Bankruptcy Institute's Commission on Consumer Bankruptcy. Our Report recommended numerous changes to improve bankruptcy law to make it serve everyone in the process more effectively. If you live in Eastern Missouri, visit our website, send an e-mail or give us a call (314) 781-3400. Our website: STLBankruptcy.com

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