Preparing for a Chapter 7 meeting of creditors
The meeting of creditors is required for Chapter 7 applicants, and allows creditors to speak to the trustee and debtor.
Chapter 7 bankruptcy allows people to gain financial freedom from their extensive debt. With more than 500,000 cases filed during a 12-month period between 2015 and 2016, Chapter 7 remains the most popular form of bankruptcy, according to U.S. Courts. Also referred to as liquidation bankruptcy, a number of debts, including credit card and medical expenses, can be discharged in a Chapter 7. This makes it so the South Carolina debtor is no longer responsible for repaying those expenses. During the Chapter 7 bankruptcy process, debtors must meet a specific set of requirements, including attendance at the meeting of creditors.
What is the meeting of creditors?
When people file for Chapter 7, they must submit a complete list of the creditors that they are indebted to. These creditors are then invited to attend a meeting of creditors, which is conducted by a court-appointed trustee. At the meeting, the creditors are encouraged to ask the debtor and trustee questions regarding the case. When the debt becomes discharged, the creditors will be unable to regain the lost money and will ultimately have to write it off.
Trustees are also responsible for making sure the debtor understands how filing for Chapter 7 bankruptcy will affect his or her credit. The debtor must also understand that he or she will be unable to file for any other types of bankruptcy for a specific time period following the discharge of debt.
The trustee will determine whether the debtor has any liquid assets and may in some cases, repossess valuable property that is not exempt. The repossessed property is then sold and the money is distributed to the creditors involved in the case.
Getting ready for the meeting
Preparing for the meeting of creditors begins by submitting a full list of creditors to the court, along with a list of exempt and non-exempt property when submitting the application for bankruptcy. Debtors should go to the meeting prepared to truthfully answer any questions regarding their debt, possessions and finances. In some cases, the trustee may ask for additional documentation that the debtor must obtain and submit to the court before a final decision can be made.
Legal representation may help
It can be difficult to make good decisions when you are under high levels of stress. Having an attorney present may help to increase your confidence and expose you to all of your legal options. A lawyer who has full knowledge of South Carolina bankruptcy laws may be extremely helpful to you in your case.