The vast majority of bankruptcy petitioners have never had previous cause to set foot in a courtroom, and the experience of discussing one’s debt with an unknown official in a federal court is extremely stressful for those involved. If your bankruptcy hearing is causing you anxiety, take a tip from boy scouts and girl scouts everywhere: be prepared. When you’re prepared and know what to expect from bankruptcy court, you will be more relaxed and confident. The key to achieving an affordable bankruptcy is to recognize that bankruptcy help is there in the form of federal and state laws that protect honest debtors like you.
Section 341 Meeting of Creditors Hearing:
Under Chapter 7 bankruptcy rules and Chapter 13 bankruptcy rules of the U.S. Bankruptcy Code, a 341 hearing is scheduled for every case that is filed. The code requires all chapter 7 and chapter 13 bankruptcy petitioners to meet with a court appointed Trustee.
The goal of the Section 341 Meeting of Creditors Hearing is to give the Trustee an opportunity to review the bankruptcy forms and financial documents that you or your bankruptcy attorney submitted. The Trustee will use this meeting as an opportunity to ask you questions about your debts and financial circumstances in order to inform their decision to allow or object to your bankruptcy case. Attorneys representing your creditors may also be present at this hearing and may pose additional questions to you regarding your financial state of affairs.
Chapter 13 Confirmation Hearing:
Within 45 days following your initial meeting of creditors, the bankruptcy judge will hold a confirmation hearing to determine whether the proposed Chapter 13 reorganization or payment plan is feasible and satisfies the standards for confirmation under U.S. Bankruptcy Code. Creditors may object to the debtor’s plan on the basis that the plan proposes to pay back less than the creditors would receive if the debtor’s assets were liquidated, or the plan doesn’t account for most of the debtor’s disposable income for the three or five year commitment period.
If the court confirms the plan, the Chapter 13 Trustee will distribute funds received under the plan to priority creditors. If the court declines the plan, the debtor may file a modified plan or convert the case to a liquidation case under Chapter 7 bankruptcy rules.
You will need to bring the following with you to your bankruptcy hearing:
- Government issued photo ID such as a driver’s license or passport;
- Social security card or several pay stubs with your social security number on them;
- A list of all creditors and the amount and nature of their claims;
- The source, amount, and frequency of the debtor’s income;
- Most recent federal and state tax returns;
- A list of all of the debtor’s property;
- Homeowners must bring a copy of the deed, mortgage statement and proof of insurance;
- Car owners must bring paperwork demonstrating ownership or the balance due on loans and proof of insurance;
- A detailed list of the debtor’s monthly living expenses including, food, clothing, shelter, utilities, taxes, transportation and medication; and
- If your taxes are not current, you must demonstrate that your back taxes have been filed or will be by the time the case is confirmed by the bankruptcy judge.
Chapter 7 Bankruptcy Rules:
To establish whether a presumption of abuse exists, all individual debtors who file a Chapter 7 bankruptcy petition must complete Official Bankruptcy Form B22A, entitled “Statement of Current Monthly Income and Means Test Calculation – For Use in Chapter 7.” The Official Forms may be downloaded from the U.S. Courts website.
Chapter 13 Bankruptcy Rules:
Filing the bankruptcy petition under Chapter 13 “automatically stays” most collection actions against the debtor, co-debtors or the debtor’s property. For homeowners, the automatic stay stops a foreclosure proceeding as soon as the debtor petitions for Chapter 13 bankruptcy protection. During the period the stay is in effect, creditors may not proceed with lawsuits, wage garnishments, or contact the debtor for the purpose of demanding repayment. The bankruptcy clerk notifies the debtor’s creditors of the bankruptcy filing. Through a Chapter 13 reorganization plan, the debtor may satisfy past-due payments over a reasonable period of time.
Bankruptcy Court Prep:
Now that you know what to expect from your bankruptcy hearings, here are a few remaining tips:
- Double-check that you have everything you need. Be prepared and print off the checklist of documents you need to bring with you to your bankruptcy hearing. If you haven’t already handed them over to your bankruptcy lawyer, make sure to bring them with you.
- Dress to impress. A shirt and tie for men, if you have it. A blouse and dress pants or skirt for women, if you have it. To show respect for the court process and the people who have shown up to review your case and circumstances, do not wear jeans and a t-shirt.
- Arrive early. If you need directions to the courthouse or are unclear about where your hearing will be located in the building, call the your lawyer or contact the courthouse the day before your hearing. Arrive 30 minutes to an hour early.