After a Chapter 7 bankruptcy petition is properly filed with the Court, it will provide you with a date in which you will need to meet the assigned Bankruptcy Trustee to go over the petition.  The main task of the Trustee is to sell nonexempt property to repay general unsecured creditors.

The 341 hearing will be set at least 21 days but not more than 40 days after you properly file your petition with the Bankruptcy Court. It will be held in a conference room where other petitioners (individuals that also filed a Chapter 7 bankruptcy petition) will be waiting their turn to speak with the Bankruptcy Trustee.  The Bankruptcy Trustee is not a judge but a lawyer that has specialized in bankruptcy law.

When entering the conference room, there will be a Bankruptcy Information Sheet which will detail what will occur at the 341 hearing.  Its called a “341 Hearing” as 341 is the section of the Bankruptcy Code that details the meeting of the creditors.  The Trustee may require that you have read the information sheet before meeting with him or her.

When the Trustee calls your name, he or she will want you to proceed to the front where the Trustee will ask for your identification (valid ID and social security number).  Next, you will take an oath as if you were in a courtroom.  The Trustee will go over your petition to ensure that you are familiar with it, that it is correct, has all your debtors listed and that there are no changes.

The Trustee will have reviewed the Bankruptcy Petition prior to meeting with you so he may ask you questions specific to your petition.

Your attorney will be there mainly to guide you through the process. However, unless the Trustee asks questions of the attorney, the Trustee will want to hear from you, the bankruptcy petitioner.

The main thing to do is to keep calm, listen to the Trustee and asks all questions truthfully.  While the environment may seem intimidating, this process is much more laid back than before a judge.

If you want further assistance in a bankruptcy, please contact Cruz Law, PLLC.

When thinking about filing for bankruptcy, there are several practical things you should know before making the decision.

As we’ve talked about before, there are two types for people: Chapter 7 and Chapter 13.  Chapter 7 discharges most debt although you may have to give up nonexempt property.  A bankruptcy trustee will review the paperwork (petition) filed with the bankruptcy court.  The trustee will determine what property is exempt and what is nonexempt.  A Chapter 13 creates a plan that must be approved by a bankruptcy trustee.  The plan allows for you to keep your property so long as you make scheduled payments.  For more information on a Chapter 7 or Chapter 13, please contact me.

Here are some things that you should do if you are thinking about filing for bankruptcy:

1. If you have a retirement plan like a 401K or IRA, do not dip into those funds to pay off debts.  In bankruptcy, retirement plans are exempt from creditors.
2. Do not run up credit card debt prior to filing your bankruptcy.  A bankruptcy trustee may find out about this which may cause delay in your bankruptcy and maybe worse.
3. Tell your attorney when filing the bankruptcy petition of all of your debts.  If you do not reveal any debts, the bankruptcy court will not discharge the debt.  Thus, you still may be responsible for the debt even though it could have been discharged.
4. Do not transfer assets to another to avoid creditors.  A bankruptcy trustee may consider this a fraudulent conveyance.

Filing Fee waivers or payment plans

While you may have to pay for an attorney to help you with your bankruptcy, you may be able to file for a fee waiver of your bankruptcy petition.   The other alternative is that you pay the bankruptcy fee in installments.  You should ask your attorney about these alternatives when filing for bankruptcy.

If you have further questions about bankruptcy, please give me a call at (206) 684-9462.

Here’s an interesting story from Nevada regarding the Chapter 11 proceedings of Xyience, a sports nutrition drink manufacturer. The bankruptcy court recently sanctioned Fertitta Enterprises for failing to provide documents during discovery.

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Filing Fees for U.S. Bankruptcy Court in Western Washington will be going up November 1st. Notably, Chapter 7 bankruptcy fees will rise from $299 to $306 and Chapter 13 fees will go from $274 to $281.