You’ve filed for bankruptcy, and you get a notice from the court about a creditors meeting. What is this? Is it important? Do you have to go? What will happen at the meeting? Can the creditors stop your bankruptcy case?
Most people who file a bankruptcy case do so once in their lives. Thus, most people who file bankruptcy have no idea what a creditors meeting is, what happens there, what impact it can have on their bankruptcy case or, truthfully, anything at all about what the creditors meeting means or does. This is only one of many reasons why you should always hire an experienced attorney to take you through bankruptcy. An experienced attorney can guide you and help you understand what happens when you file bankruptcy every step of the way, including the meeting of creditors.
What is a Creditors Meeting?
Anytime someone files for bankruptcy protection, a creditors meeting is required. The meeting is exactly what the name implies – a meeting of the creditors, the debtor, and the bankruptcy trustee. Known as a “Section 341” meeting, named for the section of the Bankruptcy Code that calls for the creditors meeting, this meeting gives the trustee a chance to ask the debtor questions about the information provided in the debtor’s bankruptcy filing. It also gives the trustee the opportunity to question creditors, and for creditors to provide their input regarding the debtor’s bankruptcy filing.
Bankruptcy law requires that the meeting is scheduled within “a reasonable time” of the bankruptcy filing. Generally, the meeting is scheduled between 20 and 40 days after the debtor’s filing. The debtor has no input regarding the scheduling but is required to attend. The creditors, who also have no input regarding the scheduling, are not required to attend if they do not choose to do so. In fact, usually few creditors, if any, actually appear at the creditors meeting. Often, the meeting is a one-on-one between the trustee and the debtor, with the trustee seeking as much information as possible regarding the debtor’s filing and the underlying circumstances. However, the meeting is required by law, and the debtor is unlikely to get a discharge in bankruptcy without attending the meeting.
This makes attending the meeting of paramount importance. There are few excuses that will persuade a bankruptcy trustee to change the meeting date and time. Not having a babysitter or being “unable” to leave work will usually not justify missing the meeting. Incarceration or military deployment overseas will carry more weight. If you really, truly cannot attend the meeting as scheduled, contact your attorney immediately. With enough lead time and a good enough reason, your attorney might be able to persuade the trustee to reschedule. If your attorney cannot get the meeting rescheduled, you will need to do everything you can to be there for the meeting. Failure to attend can result in dismissal of your entire bankruptcy case without a discharge of your debts, and it can be costly to file for bankruptcy again.
The real reason for the creditors meeting is to give the trustee the opportunity to question the debtor under oath regarding the debtor’s filing, particularly with regard to debts and assets, actions that led to the bankruptcy filing, property, liabilities, location and ownership of assets, and other financial matters in the debtor’s life that could be pertinent to the bankruptcy case. Usually, the trustee will only seek clarification of any aspects of your bankruptcy filing and its accompanying schedules of information. If there are no apparent inconsistencies in your filing and the schedules, the meeting can be very brief. So long as your financial situation is actually as represented in your filing, and that situation qualifies for bankruptcy protection, the trustee is unlikely to devote a lot of time to question what appears to be a legitimate, straightforward bankruptcy filing. Your attorney can help you prepare for the meeting and advise you what questions to expect.
Not attending the meeting, however, no matter how valid and straightforward your bankruptcy filing may be, can have dire consequences. If you fail to appear at the meeting, the trustee can ask the court to dismiss the bankruptcy case. The trustee also can ask the court to hold you in contempt of court for failing to cooperate with the trustee. Those outcomes would be a steep price to pay for not attending a meeting that usually is measured in minutes, not hours.
WONDERING WHAT HAPPENS WHEN YOU FILE BANKRUPTCY IN MINNESOTA?
If you are wondering what happens when you file bankruptcy in Minnesota, you should understand every aspect of the process and your obligations under the law. Filing for bankruptcy requires a creditors meeting, and it is important for you to understand what the meeting entails. To get answers to your specific questions or for a free case evaluation to determine how bankruptcy can help you, do not hesitate to contact the bankruptcy attorneys of Kain & Scott at 800-551-3292 or through our online contact form today.
