Meeting With the Chapter 7 Bankruptcy Trustee

A couple of days after your file a Chapter 7 bankruptcy a bankruptcy trustee will be assigned to your case. About thirty days after you file your bankruptcy, you and your attorney will be meeting with the assigned Chapter 7 bankruptcy trustee at the meeting of creditors. The meeting of creditors is required under Section 341 of the United States Bankruptcy Code. The meeting is recorded, under oath, and creditors may attend and ask questions. The debtor must appear and answer questions to the best of the debtor’s knowledge.

Purposes of Chapter 7 Meeting of Creditors

One purpose of the meeting of creditors in a Chapter 7 bankruptcy is for the bankruptcy trustee to determine if the schedules and petition filed with the court are correct and truthful and whether any changes need to be made. The bankruptcy trustee will also examine the Trustee Information Sheet and ask questions based on the answers contained therein.

However, the main purpose of the meeting of creditors in a Chapter 7 bankruptcy is to assist the bankruptcy trustee in finding and collecting assets. Those assets become the bankruptcy estate. The trustee will get to keep a portion of the bankruptcy estate which motivates the trustee. The remaining portion of the bankruptcy estate will be distributed according to bankruptcy law.

Exempt Assets and Non-Exempt Assets

The trustee cannot collect properly claimed exempt assets of the debtor. Exempt assets are assets that a debtor is, by law, entitled to keep. Examples are household goods, clothing, jewelry, motor vehicles, and homes, up to certain dollar amounts. If not exempt, the trustee can collect the asset for the bankruptcy estate.

Transfers of debtor assets before filing bankruptcy are also examined to determine if they were proper transfers rather than fraudulent, or preferential transfers. A fraudulent transfer may occur, for example, where the debtor transferred a car to a relative to try to shield it from the bankruptcy estate. A preferential transfer may occur where a debtor paid off a loan owed to a parent. In other words, the debtor preferred the parent creditor over other creditors.

Tell the Truth, Then Stop Talking

When responding to a question from the trustee or a creditor, the debtor must first make sure that he or she understands the question. If not, the debtor should ask for clarification. Once understood the debtor should answer truthfully and concisely. Once answered, the debtor should stop talking. Wait for any further questions.

Have your financial situation considered by an experienced bankruptcy attorney and former Trustee for the U.S. Bankruptcy Court. Call or contact LONG & LONG P.C.now at 303-832-2655, or www.denverbankruptcylawyer.net.