What Is The 341 Meeting Of Creditors In Chapter 7 Bankruptcy?

In a Chapter 7, the trustee has a meeting. They go through the  bankruptcy. In most cases, it is perfunctory and well prepared. Although  creditors can appear, I cannot remember the last time a creditor  appeared at a meeting. The trustee is looking to see if you are hiding  assets, but this very seldom happens. If a person is honest and  forthright and if they have assets, they can be impeded in a Chapter 7,  and could have to file a Chapter 13. However, every once in a while,  people have assets that pop up, which we do not know about. Someone can  tell them, but most Chapter 7 meetings take about ten minutes, and that  is the end of it. A Chapter 13 can be a little more complicated.

A  Chapter 13 trustee, in part, is protecting the interests of creditor’s,  particularly unsecured creditors. Are you paying enough dividends to  unsecured creditors in a Chapter 13? Are you using all of your  disposable income? Therefore, you can have these problems with a Chapter  13, but a well-prepared Chapter 13 avoids almost all these problems.

IS THE 341 MEETING OF CREDITORS AN INTIMIDATING PROCESS?

A  341 meeting is usually very much less intimidating than people make it  out to be. The attorney is always present. The people who get into  trouble in Chapter 13 or Chapter 7 meetings are the people who do it on  their own.

AT WHAT POINT IN THE BANKRUPTCY DOES THE 341 MEETING GENERALLY TAKE PLACE?

The  law says twenty to forty days after the filing that this meeting takes  place. I do not ever recall it happening before the twenty days though.

AT THAT POINT HAVE PEOPLE TAKEN ANY SPECIFIC COURSES REQUIRED FOR PRE OR POST BANKRUPTCY?

Yes,  in order to file bankruptcy if your debts are consumer debts, you have  to take a course of credit counseling. It costs about $10 and lasts for  about thirty minutes. It is totally useless, a waste of time, and a  waste of money, but it has to be done. After the case is filed, in order  to get a discharge, you have to do what is called debtor education,  which is also about $10. These are usually done online. This one takes  an hour, I understand. It is also useless. If a person owns a restaurant  and does not have a house, his business debts may exceed his consumer  debts, he does not have to do it, but for most people they have to do  it. You cannot file a case until you have the certificate, which we file  with the case. If someone were to file the case without getting a  credit-counseling certificate, the case would be dismissed almost  immediately.

WHEN IS SOMEONE’S BANKRUPTCY ACTUALLY COMPLETE?

You  have to go to the trustee’s meeting. Through the court processes, which  is clerical, about four months from the date of the filing, but  essentially once you go to the meetings that is it. You do not have to  think about it anymore. You get an order of discharge, and it is filed  along with your important papers. In a Chapter 13, it is after you have  paid all the payments required by the Chapter 13 plan. Then after thirty  days after the final payment, you get an order of discharge.

WHAT ARE SOME RED FLAGS I SHOULD LOOK OUT FOR WHEN RETAINING A BANKRUPTCY ATTORNEY?

I  think you should avoid those bankruptcy mills. They do a tremendous  amount of advertising, and they are under a great deal of pressure to  sign everyone up as soon as they can. I have been told people should not  file a bankruptcy. People come in who have full security, and I always  advise them they do not have to do it, because creditors are not allowed  to take any of their money. It is best to have someone who is  experienced in consumer bankruptcy who knows the ins and outs, the  tricks of the trade etc. We think we are better. We do not rush people.

When  people see us, the first thing we do is try to list all their debts; we  try to get their credit reports. After the case is filed, they are  essentially assigned to an attorney who will pay per calls. You can  always talk to a lawyer not a paralegal. You get to talk to the same  person every time. Some of the larger firms, you call up one day, you  talk to one person, you call them a week later, and there is someone  else, it goes on like this every time. That is what I think our  advantage is.

We feel we are far more  personable towards our clients. More than most firms, we try to avoid a  cookie cutter solution for everyone. We know that each client is unique,  and their problems are too, we care about our clients.

WHAT ARE THE MOST IMPORTANT LESSONS THAT SOMEONE CAN LEARN FROM FILING BANKRUPTCY?

Just  be careful. If you want to buy a car, try to buy a modest car. There is  a lot of information on the internet about the value of cars. Always  check out what the interest rate is. Surprisingly, people generally do  not know what their interest rate is. Try to live within your means. I  think people should try to make a payment to themselves every payday,  and develop that as a habit, even if it is only $5 that you put in the  bank every week. It is very important after the filing of the case that  you not fall behind on your debts. I advise people to try to pay  everything in cash.

If you pay in cash,  you understand the process more than you do in a credit card. If you go  to a grocery store, and you are using a credit card, you will buy more  groceries, you will buy snacks, stuff you do not need. You should dig  into your pockets to avoid that.

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