What Happens After the Meeting of Creditors

The Meeting of Creditors or a 341 meeting is scheduled about 30 days after the filing of the bankruptcy. At that Meeting, the Trustee appointed in your case will ask you some questions. Usually the Meeting lasts no more than 5 minutes unless the case is unusually complicated or there are issues that come up during the questioning.

Creditors usually don't show up. The only creditors that I have seen show up are parents, brothers, sisters, ex-wives, ex-husbands, and sometimes former best friends or business partners. They hate it when you try to get rid of their debts, and they have information on you, and whether that information is relevant or irrelevant, they will spill their guts out to the Trustee.

Many times my Clients are confused, and think that if everything goes well at the Meeting of Creditors, the case is over, and they are now guaranteed to get their Discharge. Discharge, as we know is the legal forgiveness of debt, and is only given to the "honest but unfortunate" Debtor.

After the Meeting of Creditors, Creditors and other interested parties have the right to object to your discharge. Remember, you filed a bankruptcy to get rid of your debts, but other people may have other ideas and may not want you to be legally forgiven of your debt obligations. Why and Who would be objecting to your bankruptcy:

Creditors: they can object if you have committed "fraud." Fraud would be borrowing money knowing that you are never going to pay it back. For example: just days or weeks or even a few months before the bankruptcy, you go on a shopping spree, and use your credit cards like crazy buying everything in the world like paintings, expensive clothes, airline tickets, jewelry, gifts for their children, grand children or significant others, etc. I know of one person whose bankruptcy attorney told them to go and have a good time on their credit cards, and a good time they had. They went on a round the world cruise, and spent $60,000 on their American Express card, and $20,000 on their Chase card [in less than 3 months,] and then as soon as they came back, their bankruptcy attorney filed them in a Chapter 7 Bankruptcy. Wrong move !!! American Express objected to their Discharge, and then the Trustee joined the band wagon. This poor elderly couple never got a Discharge in their bankruptcy.

Trustee: A Trustee can object to your Discharge if he or she feels that you are not being honest, your are not cooperative with documents and records, you are hiding assets, or if you have transferred assets before the bankruptcy, or you are not being truthful about the value of your assets. Did you know that even a defunct..worthless corporation that you have formed is an asset in a bankruptcy. Reason: you own 100% of the shares of that corporation, and when you disclose this corporation on your bankruptcy papers, a Trustee or a Creditor can then inquire about it. But if you fail to disclose this corporation, and the Trustee or a creditor finds out, they will think you are trying to hide something. Not all Trustees will object if some defunct corporation is not disclosed. But there are some who go by the book, and will object for the sake of objecting. And they are well within their rights. The moral of the story is: be honest and disclose. If the timing is not correct, your Bankruptcy Attorney can delay the filing of the Bankruptcy.

U.S. Trustee: The U.S. Trustee works for the Department of Justice, and their job is to make sure that all of us follow the law, and that the filing of your bankruptcy is not an "abuse" of the Bankruptcy Law. The filing of your Bankruptcy may be deemed an abuse if you are making too much money, and that you should be filing a Chapter 13 and paying back some of your debts, or you never made enough money but you owned millions in assets. The U.S. Trustee wants to know how did you come to own 15 homes when you have never made more than $30,000 a year in the last 5 years. They may want to see your loan applications to see if you lied on your mortgage applications, and if you did they may turn you over to the U.S. Attorney who may prosecute you for mortgage fraud.

If none of these people/entities object in the 60 days following the Meeting of Creditors, the Court will automatically enter a "Discharge of Debtor" in your case. Once this is entered, your debts are legally forgiven and you now have your "fresh start."

Attorney Elias Leonard Dsouza concentrates his practice on Bankruptcy [Chapter 7, 13 & 11,] Foreclosure Defense, Defense of Credit Card Lawsuits, Credit Restoration, and Debt Settlement & Credit Counseling. Our office also handles complex Civil Litigation, Business & Corporate Transactions & Litigation, Employment Law, Collections, Creditor representation, Real estate transactions, Personal Injury, Family Law, Immigration, Landlord-Tenant law, Franchise Law, Tax Law and We Sue Debt Collectors under the Fair Debt Collection Practices. www.Dsouzalegal.com. 954-358-5911

"TRUSTEE" in Bankruptcy. Who is this person ? What is this person's job?

A "TRUSTEE" in Bankruptcy. Who is this person ? What is this person's job?

Any time an "individual" or a "business" files a Bankruptcy, a Trustee is appointed in that case. The United States Trustee who works for the U.S. Department of Justice appoints the Trustee in each and every case. In Chapter 11 Bankruptcies, the Debtor [person or individual filing for Bankruptcy] is the Trustee or Debtor-in-Possession. The U.S. Trustee supervises the Debtor, and if the Debtor mismanages or does not do what he/she or it is supposed to do.. the U.S. Trustee will ask the Court to appoint a Trustee in the case.

The Trustee is your best friend or your worst nightmare.

If you are an honest Debtor, and you follow all the bankruptcy rules (and some of the rules made up by Trustees,) then the Trustee is your best friend, otherwise, the Trustee is your worst nightmare in a Bankruptcy case..more so than your creditors.

One of the the Trustee's job is to collect all your "non exempt" assets, liquidate them for cash, and then  distribute the cash prorata to all your creditors after taking out his fees for administration and fees for any attorneys he may have to hire.

Another function of the Trustee is to make sure that you are Honest, and that you are following the rules of Bankruptcy.

Bankruptcy Trustees are highly intelligent and sophisticated people. So don't try to pull a fast one over them. For example, if you live in a home that is worth $500K, and you state in your bankruptcy schedules that you household goods are worth $500..you need to be prepared for an home inspection by the Trustee or one of his staff.

Likewise they will catch you if you have transferred assets before the filing of your bankruptcy. Trustee's don't do all of this stuff from the goodness of their heart. They have a great incentive in finding assets in your bankruptcy...they get a commission based on the value of the assets they are able to collect from your bankruptcy estate. All of the above relates to Chapter 7 liquidation bankruptcies.

In Chapter 13, 12 & 11, the Chapter 13 Trustee does not want of take any of your assets. All the Chapter 13 Trustee does is object to the Confirmation of the Chapter 13 Plan, and that forces you to come up with a value of your own non-exempt, transferred, or undervalued assets, and then pay that much amount through a Chapter 13, 12 or 11 Plan. If you fail to do so, the Trustee can and will ask the Court to dismiss your Bankruptcy.

The moral of the story: In Bankruptcy you are given a "fresh start" not a "head start." A discharge is granted to only the honest but unfortunate debtor. Bankruptcy is also an "equitable" process when the rights of creditors and interested parties are as important as the rights of the person or business filing for bankruptcy. It is a two-way street..give and take.

Your Bankruptcy Attorney is constantly dealing with the whims and fancies of the Court appointed Trustees to make sure that your rights are protected, and that you accomplish your goals through Bankruptcy.

Attorney Elias Leonard Dsouza concentrates his practice on Bankruptcy [Chapter 7, 13 & 11,] Foreclosure Defense, Defense of Credit Card Lawsuits, Credit Restoration, and Debt Settlement & Credit Counseling. Our office also handles complex Civil Litigation, Business & Corporate Transactions & Litigation, Employment Law, Collections, Creditor representation, Real estate transactions, Personal Injury, Family Law, Immigration, Landlord-Tenant law, Franchise Law, Tax Law and We Sue Debt Collectors under the Fair Debt Collection Practices. www.DsouzaLegal.com. 954-358-5911.