In a Chapter 13 Bankruptcy case, the Creditors Meeting is a step in the process of the case where the debtor(s) must appear with the Chapter 13 Trustee and answer typically routine questions about their financial circumstances. While there are some similarities to a Chapter 7 Bankruptcy Creditors Meeting, there are some important differences. One similarity is the importance of retaining experienced New Jersey Bankruptcy attorney and law firm.
The Creditors Meeting in a Chapter 13 Bankruptcy case is conducted by the Standing Chapter 13 Trustee who handles all Chapter 13 cases in the venue in which your case was filed. The Chapter 13 Trustee’s focus is different than a Chapter 7 Trustee. While a Chapter 7 Trustee’s mainly focuses on your assets to determine the Bankruptcy Estate under Section 541 subject to your exemptions under Section 522.
A Chapter 13 Bankruptcy is a “reorganization” or “repayment plan”. The Chapter 13 Trustee cannot sell any of your assets and is instead focused on your Chapter 13 Plan of reorganization and ensuring that your plan complies with the applicable Chapter 13 statutes and is a plan that can be confirmed by the Court.
Much like a Chapter 7 Creditors’ Meeting, the Chapter 13 Trustee will still be interested in the value of your assets and ask similar questions regarding your real estate and other potential large value assets as we set forth above. These questions are aimed at the Trustee determining if you have any “non-exempt” equity in any of your assets. Although the Chapter 13 Trustee cannot sell your assets, the Bankruptcy Code does require you to pay unsecured creditors no less than the amount they would receive in a Chapter 7 liquidation. See 11 U.S.C. §1325(a)(4).
The Chapter 13 Trustee may also verify other relevant information about you and your finances. Since future “disposable income” is an important issue in a Chapter 13 bankruptcy case, the Trustee may confirm your current employment and income sources or whether anyone else contributes to the household income.
As the Trustee’s staff reviews your petition prior to the creditors meeting, the Trustee or staff attorney may ask some question about expenses listed in your petition. First, remember the bankruptcy petition must be true and correct so there is nothing wrong with listing any necessary expense. Often the Creditors Meeting is a chance to explain for yourself why your expenses may be higher. This often happens where our client is paying very high out-of-pocket medical expenses, high travel expenses, college tuition, preschool or daycare expenses, or any other amounts which might be higher than typical.
As experienced Chapter 13 bankruptcy attorneys, we expect to prove all issues in your case and are prepared to address any expense with both evidence and legal arguments. This is part of our preparation for filing the Chapter 13 case.
The Trustee is also required to verify whether you owe any Domestic Support Obligations, whether you have filed required tax returns, and if you maintain insurance on your home and vehicles.
As we have explained before, it is extremely unlikely that any creditors will appear at a Chapter 13 Creditors Meeting. Even more so that a Chapter 7 case, the meeting of creditors in a Chapter 13 case is simply a required step in the process but does not really finalize any part of the case – other than your duty to appear.
Typically, creditors know that in a Chapter 13 case, the important issue is the confirmation of a Chapter 13 Plan and they can address any concerns through the filing of an objection to confirmation of the Plan. These objections are often routine and are easily resolved between our office and creditors’ attorneys.
One of the reasons to hire an experienced New Jersey bankruptcy law firm for a Chapter 13 case is to remove the stress about standard issues like the creditors meeting and objections to the Plan. Our clients’ most common statement after appearing with us at their Chapter 13 Creditors Meeting is “Is that it?”. The answer is that with experience and preparation, we can ensure our clients are not surprised, anxious, or overwhelmed during a Chapter 13 process. We know that this is the best way to ensure our clients in Chapter 13 bankruptcy cases have the greatest chance to succeed in the reorganization of their finances.
The Chapter 13 Trustee will ask you if you have filed all of your tax returns that are required to have been filed. He will ask if your insurance is in place on your home and your vehicles; and whether you are required to pay alimony or child support. He will then go through your plan with you and ask if you have started to make your monthly plan payment to him.
Those are the basic questions that you are going to be asked at the 341a meeting. The hearing itself should last 5 to 10 minutes tops. The longest part will probably be sitting around in the hearing room waiting to be called by the Trustee. My best advice is to answer the questions honestly and succinctly. If you don’t know an answer to a question, it is OK to say I don’t know, he information can always be provided after the fact. If you don’t understand a question don’t answer it, the Trustee will repeat it or your attorney can help you out with it. Overall, just stay relaxed, it’s not so bad, especially if you have an experienced attorney there with you at the hearing.
The information provided here, as with all information on our website, is not intended to provide legal advice to anyone considering bankruptcy. If you are experiencing serious debt problems or discussing these problems with a friend or family member, the easiest way to learn how the bankruptcy laws may protect you is to arrange a Free Case Review with an experienced Bankruptcy Lawyer. Learn about your rights and options before you make a decision from attorneys who have helped families and businesses for over 30 years. We know that making that first call is often the hardest step but once made, you can often find relief and a fresh start for your financial future.