What is the Meeting of Creditors and Why do I have to go?

One of the most central moments during a bankruptcy is the initial meeting of creditors. There are a number of procedures and requirements with which the debtor and her attorney must comply. Failure to do so will likely lead to dismissal of the case. This means that the debtor isn’t going to get their debt discharged.

There are many purposes for the meeting of creditors, but the primary focus is to obtain further information about the debtor’s case, particularly data regarding the debtor’s assets and liabilities. In a Chapter 7 bankruptcy, the trustee is interested in, among other things, determining the value of assets and whether or not they are exempt. In a Chapter 13 bankruptcy, the trustee is interested in, among other things, determining if the payment plan is feasible and that the creditors are being paid as much as possible.

Document Requirements

Depending on local practice or bankruptcy rules, the documents required may vary. In Sacramento, there are many different trustees. Whether they are Chapter 7 or Chapter 13 trustees, they require the documents identified in the bankruptcy code. In addition, they often request additional documents. The case will be over much more quickly than the debtor would like if the trustee doesn’t get the documents she requests.

In the Eastern District of California, debtors are required to produce photo identification and proof of social security at the meeting of creditors. It is important to work closely with your attorney to make sure the proper documents are provided.

What does the trustee ask?

The trustee asks many questions, which often vary depending on the facts of the case. It is important to listen closely to the trustee’s questions and answer thoughtfully and truthfully, as the debtor will be under oath and answering under penalty of perjury. Answering honestly will also make the whole process goes more smoothly. The trustee often asks if the debtor is expecting an inheritance or if they’ve won the lottery. The trustee will ask whether the debtor read and understood all the documents that they signed and filed with the bankruptcy. In a Chapter 7 in Sacramento, there is a “Bankruptcy Information Sheet” that the debtor should read before the meeting. The trustee will ask if the debtor has done so.

There are many more questions that could come up. The best way to be prepared is to talk to an attorney about the facts of the case before the meeting. A good attorney will help prepare the debtor for all aspects of the meeting of creditors.

Do creditors really show up?

Yes. But not always. Depending on the situation, creditors will be more or less likely to appear. If a creditor believes the debtor is hiding assets or not being truthful in the bankruptcy documents, the creditor may show up and ask questions to get more information. If there is a highly contested issue in the bankruptcy, creditors are more likely to appear and ask questions of the debtor. Typically, however, in consumer bankruptcy cases, it is fairly rare for creditors to make an appearance at the meeting of creditors.

That doesn’t sound so bad.

No, it doesn’t. But it is key for the debtor to be responsive to communications from her attorney so that they can work together to satisfy all the requirements and keep the trustee satisfied. Preparation and cooperation will make the meeting go smoothly and get the debtor one big step closer to discharge.