But the following are some of the most common questions the trustee may ask:
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Along with the mandatory questions, trustees typically ask about your property and other assets, income, expenses, and debts. Other areas will include discrepancies in your bankruptcy forms and how you came up with a value for various property items.
Whether you file for Chapter 7 or Chapter 13 bankruptcy, you have to attend a hearing called the meeting of creditors (also called the 341 hearing) to answer questions about the information contained in your bankruptcy paperwork. The meeting of creditors is conducted by the bankruptcy trustee appointed in your case.
At the 341 meeting (also called the creditors' meeting), the trustee will ask about your bankruptcy forms, property, debts, and more. Please answer a few questions to help us match you with attorneys in your area. "In Nolo you can trust." We match 50,000 consumers with lawyers every month. Our service is 100% free of charge.
In Chapter 7 bankruptcy, the trustee pays your creditors with proceeds obtained from the sale of your nonexempt assets. This means that most of the trustee's questions in Chapter 7 bankruptcy will typically focus on your property and bankruptcy exemptions.
About 62% of bankruptcy cases filed are Chapter 7, and 38% of cases filed are Chapter 13, according to a 2019 report required by the Bankruptcy Abuse Prevention and Consumer Protection Act . [ 3] Personal bankruptcy helps with consumer debt such as credit card debt, medical bills, and old utility bills. Sometimes personal bankruptcy is used for business debt acquired as a sole proprietor. A Chapter 7 can also help with certain garnishments against your paycheck and bank account, a car loan deficiency after a repossession, and collection efforts that disrupt your life.
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If you received a discharge in a previous Chapter 13 filing, you only have to wait two years to refile a bankruptcy petition for the same chapter. You’ll have to wait six years from your most recent Chapter 13 bankruptcy filing if you intend to file a Chapter 7 case.
To file a Chapter 13 plan, your unsecured debts must be less than $419,275, and you must have less than $1,257,850 in secured debt. [ 4] . A lawyer can give you legal advice on the best type of bankruptcy for your unique financial situation.
The Means Test is a formula that evaluates your income and expenses and compares it to government data to see if your disposable income is low enough to qualify for a Chapter 7 bankruptcy.
When you file a petition for this bankruptcy chapter, collection action will come to a stop because of the automatic stay, just like in a Chapter 7 proceeding. Although both bankruptcy chapters give you an automatic stay, a bankruptcy proceeding under 13 is more complex than Chapter 7, and creditors can object to payment plans.
A Chapter 13 bankruptcy is focused on payments and reorganization. If you can prove you have a steady income and you want to keep your car and house, 13 may be your lucky number. Under this chapter, you’ll be making monthly payments to a bankruptcy trustee to pay off your debt. If you don’t have the money or assets to pay off all of your debt, the unpaid portion will be discharged once the payment plan has been completed. If you have non-exempt assets of value—for instance, a vacation home—they will be sold off if you can’t make an acceptable repayment plan.
The bankruptcy trustee —the person tasked with administering your case—must ask all bankruptcy filers mandatory questions at the 341 meeting. Here are the questions you can count on being asked:
The creditor could inquire about differences between the information in your bankruptcy papers and the information you submitted when applying for credit .
At the 341 meeting (also called the creditors' meeting), the trustee will ask about your bankruptcy forms, property, debts, and more.
Along with the mandatory questions, trustees typically ask about your property and other assets, income, expenses, and debts. Other areas will include discrepancies in your bankruptcy forms and how you came up with a value for various property items.
One way to keep track of your research is to use the bankruptcy forms as an outline. You'll find links to bankruptcy forms and other resources in the chart below. You can also look at the list of Chapter 7 and 13 bankruptcy forms to see where this topic fits in the bankruptcy scheme (it's a post-filing issue). And this handy bankruptcy document checklist will help you gather the things you'll need to complete the petition.
The best way to protect your assets in bankruptcy is by consulting with a local bankruptcy lawyer.
Bankruptcy is an unusual area because it's essentially a qualification process. The laws provide instructions for completing a 50- to 60-page bankruptcy petition, and because all rules apply in every case, you can't skip a step.
Ask the attorney how much you will have to pay, in total. The court charges filing fees (currently $338 to file a Chapter 7 case and $313 to file for Chapter 13 bankruptcy; $335 and $310 respectively until December 1, 2020). You'll pay additional costs, such as administrative fees to the trustee in your Chapter 13 plan.
Typical bankruptcy exemptions include some or all of the equity in your home, a car, your clothing, household furnishings, and the tools of your trade; to find out more about exemptions and look at the exemption list in your state, see In exchange, your debts will be discharged (wiped out), except for some types of debt that can't be discharged in bankruptcy, such as back taxes, child support, and student loans (in most situations).
However, you must enter into a three- to five-year repayment plan to pay back some or all of your debts. Filers whose income exceeds the median income in their state and who have at least a minimum amount of disposable income each month after paying their reasonable expenses might not be allowed to use Chapter 7.
Chapter 7 lawyers require full payment to avoid having the balance owed discharged, making it uncollectable. By contrast, most filers pay less than the agreed amount to start a Chapter 13 case and pay the remainder through the repayment plan.
You'll pay additional costs, such as administrative fees to the trustee in your Chapter 13 plan. And of course, the attorney will charge you a fee to handle the case. The attorney will tell you what your fees will cover and how future services will be paid going forward.
This requirement -- called the means test -- is intended to force filers who can afford Chapter 13 to use it. When you talk to a bankruptcy attorney, the attorney should be able to tell you whether you can use Chapter 7. If you can choose between Chapter 7 and Chapter 13, the lawyer should explain the pros and cons of filing each chapter.
The counseling typically takes 60 to 90 minutes. The counseling must be provided, before you file for bankruptcy by a non-profit credit-counseling agency, approved by the U.S. Trustee ’s Office.
A: In general, there are two main types of consumer bankruptcy. The first is called “ Chapter 7 ,” “ liquidation ,” or “straight bankruptcy .” Most of your assets are sold to pay your creditors. The assets you are allowed to keep will partly depend on the state where you live. The second type is called “ Chapter 13 ,” “reorganization,” or “wage earner’s plan .” You can usually keep most of your assets in return for a court-approved repayment plan. The particular type of bankruptcy you file will depend on your circumstances. A competent attorney can help you make the decision.
The course must be a minimum of two hours.
A Chapter 7 bankruptcy can typically be completed in three to six months. A Chapter 13 bankruptcy requires repayment plan, which are typically three to five years.
You can usually keep most of your assets in return for a court -approved repayment plan. The particular type of bankruptcy you file will depend on your circumstances. A competent attorney can help you make the decision.
Real Estate Related Questions 1 Did you the list fair and a reasonable value for your property? 2 How did you arrive at the value for your property? 3 Is that an accurate value of what you could sell it for today? 4 How much did you originally purchase the property for? 5 How much do you owe on the property? 6 When did you purchase it? 7 Have you made significant improvements?
Like in any legal proceeding, you should prepare for this meeting, and consult with your attorney. The most important aspect of the 341 Meeting is complete honesty. The questions will be done under oath and potential penalty of perjury. Prepare thoroughly and answer honestly, and you’ll have nothing to worry about.
The most important aspect of the 341 Meeting is complete honesty. The questions will be done under oath and potential penalty of perjury. Prepare thoroughly and answer honestly, and you’ll have nothing to worry about.
While it is almost certain that that Trustee will not ask all of the following, it is equally certain that you should expect several of them. Please review these questions, and if you cannot answer any, you have a bit of work to do.
A section that provides information about paying back creditors over several years or working with a credit counseling agency rather than filing bankruptcy explains the advantages and disadvantages of each option, as well as resources for more information.
When discussing bankruptcy, the course lists the merits of filing a Chapter 7 case, which is a liquidation process, as well as Chapter 13, which allows debtors to keep their property while paying creditors over several years.
The cost of pre-filing counseling ranges from about $35 to $50 and typically takes less than two hours to finish online, in person or by telephone. It is divided into three areas of discussion.
Credit counseling course outlines options beyond filing bankruptcy for debtors. Within the six-month period prior to filing a petition with the U.S. Bankruptcy Court, people are required to complete a credit counseling course that analyzes the factors that contributed to their financial difficulties. As part of the 2005 reform of the federal ...
The post-filing financial management program must be taken, and a certificate of completion filed with the court, within 45 days after the Chapter 7 debtor attends the 341 meeting of creditors. In a Chapter 13 bankruptcy, in which creditors are paid over several years, debtors must file the certificate before the last payment is made through the trustee assigned to their case.
Life after bankruptcy, when people need to rebuild their damaged credit, is also explored in the debtor education course. People can learn how to review credit reports and scores and how they can be improved during the class.
Debtor education course focuses on post-bankruptcy financial issues. After debtors have completed several steps in a bankruptcy proceeding, they are expected to take a financial management course that will help them avoid accumulating significant debt in the future.
Along with a credit counseling class before filing bankruptcy, there is a post-filing course that is required by the U.S. Bankruptcy Court before debts can be discharged. But rather than reviewing alternative ways for a person to resolve their current financial troubles, as the counseling course does, the second program is focused on ...