Going To Court

Prior to the COVID pandemic of 2020, debtors were required to appear in person at the United States Bankruptcy Courthouse in Statesville, Shelby or Asheville. It was difficult to find a parking spot and debtors would typically have to sit in a crowded courtroom for 1 to 2 hours before the Trustee called their case to be heard. Fortunately, thanks to modern technology, all Trustee meetings are now conducted electronically via computer (ZOOM) at the office of the debtor(s)’ attorney. YOU NO LONGER HAVE TO DRIVE TO AND APPEAR AT THE FEDERAL COURTHOUSE. There is only one appearance you will have to make via computer at your attorney’s office, once we complete preparing and filing your petition. This hearing is not really a formal court appearance in the “traditional” sense, but it is an official legal proceeding known as a Section 341 Meeting of Creditors, or 341 Meeting for short. The meeting is typically held 30 to 45 days after your bankruptcy petition has been filed with the court. You will receive an official notice in the mail from the court which informs you of the date and time of your meeting at your attorney’s office. This notice is mailed several weeks in advance of your meeting to allow you to make arrangements to take time off from work, if necessary.

The people at this computer meeting are you, your attorney, the Bankruptcy Trustee, and any creditors who care to appear (it is VERY rare for a creditor to bother to appear or participate). Again, creditors seldom show up for these meetings, since these companies understand that your debts will be discharged in bankruptcy and, unless fraud is involved, there is nothing they can do about it. The meeting consists primarily of the Trustee asking you brief questions about your answers and information on the official bankruptcy petition and schedules that you reviewed, signed, and that were filed with the court. Although you will be under oath, there will be no judge there; and although the meetings are rather informal and conducted via computer instead of using a witness stand, it is nonetheless an official court proceeding, and the Trustee respectfully asks that you NOT wear a hat or cap during the meeting. The Trustee’s objective is not to ask you “trick” questions, but rather to ask you under oath about the information you provided on your bankruptcy petition and to assure the Trustee that the information in your petition is complete and accurate. Most of the Trustee’s questions can be answered with a simple “yes” or “no” response.

Most debtors are amazed at how easy this experience is, and after it’s all over, most say, “Is that all?” Your Trustee’s job is to find any assets of yours that are not exempt. The Trustee won’t usually ask how you got into this mess, although you might be tempted to want to tell your story. It is best to just answer the simple questions asked, since we will have already examined and dealt with any potential problem areas, such as transfers or non-exempt assets, long before you reach this meeting.

We expect that you will find that the Trustee meeting is quite reasonable and non-adversarial, particularly compared to your recent experiences with abusive bill collectors. The people in bankruptcy “court” are remarkably cordial and respectful. These people work in the bankruptcy profession day in and day out, and since most bankruptcy cases are clear cut, there likely won’t be a lot of issues associated with your case.

As long as you’ve been honest when filling out all of your paperwork, your Section 341 Meeting of Creditors will go smoothly. It’s usually a good day to celebrate, because at that point, most of your case is over. What’s left is to wait another sixty days or so to get the final decree and discharge order in the mail from the court, which means that your case is officially closed. Don’t forget to complete your second credit counseling session, if you haven’t already done so prior to your Trustee meeting; if you don’t complete your second credit counseling course on time, you will NOT receive a discharge — you will still owe all of your debts after your case closes!

At your computer (ZOOM) Trustee meeting, the Trustee will ask you to announce your name for the record (the meeting is being recorded, and as such, if you have filed a joint case with your spouse, it is requested that each of you answer the questions individually: in other words, don’t answer at the same time and talk over each other; and the Trustee will then ask you to raise your right hand and will administer an oath something like “Do you solemnly affirm that the information contained in your bankruptcy petition and your testimony here today to be the truth, the whole truth, and nothing but the truth?” After you say “yes”, the Trustee will then ask some additional questions, typically something like:

• Has anything changed since you filed your bankruptcy petition?
• Did you receive the “Statement of Information” from your attorney and did you read it? The “Statement of Information” is a written explanation of the various bankruptcy chapters, the effects of a bankruptcy discharge, and the effects of reaffirming a debt. We provide you with this required document at your first appointment with our office, and it is also included with your bankruptcy petition.
• The Trustee may ask you to confirm your intentions with regard to your secured debt – in other words, do you plan to keep making payments on your house, car, etc. (“reaffirm the debt”) or do you intend to surrender certain property to the secured creditor? The Trustee may also ask if you are current on your payments for the property that you intend to keep, and whether you have insurance coverage on this property.
• The Trustee may ask how you determined the value of your home and/or a parcel of land (online valuation, local realtor opinion of value, or official appraisal, etc.), if applicable. You may obtain online valuations of your real property from the following websites: www.Zillow.com www.Realtor.com or www.RedFin.com .
• During tax refund season, the Trustee may ask you whether you expect to receive a tax refund; and if so, how much you expect to receive or how much you received last year.
• The Trustee may likely ask about any property that you have transferred or sold during the past two years and if you have owned any real estate during the past four years. This information is required to be listed on your petition. The Trustee’s main concern is whether or not you received fair market value for any property transferred, sold or given away prior to your bankruptcy filing.
• If you are self-employed, the Trustee may ask you a few questions about the nature of your business and the valuations of your business assets, equipment, and/or tools.
• In the very rare event that one of your creditors appears online for the meeting, they will then be given the opportunity to ask you questions. The rare creditor that does appear is typically a locally-based secured creditor that has loaned you money to buy a house or vehicle. The creditor will usually only want to confirm with you that you want to keep the property that they loaned you money to purchase, and if so, they will ask to confirm that your payments are current and will ask you for the name of your insurance agent to verify insurance coverage on the property.
• The Trustee will ask if you are required to pay child support or alimony (also known as a “Domestic Support Obligation”) and, if so, if you are current on the payments.
• At the conclusion of your meeting, the Trustee will typically ask “After your attorney prepared your petition did you read it? Was it true and accurate? Did you list all of your assets? Did you list all of your debts?” The Trustee will then conclude the meeting by saying “I have no further questions.”