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What will happen at the meeting of the creditors?

On Behalf of | Sep 22, 2021 | Bankruptcy |

People file for Chapter 7 bankruptcy when they cannot pay their overwhelming debt. All debtors who file for bankruptcy under this chapter must attend a meeting of the creditors. In the meeting, the debtor will talk about their due payments and learn about bankruptcy’s different effects and chapters.

The content of the meeting

The meeting of the creditors occurs between 21 and 40 days after the filing of the bankruptcy petition. The debtors must attend this meeting, and if they filed jointly with their spouse, they have to attend together. The trustee, who will gather the debtor’s property to repay the creditors, will conduct the meeting. Three to eleven creditors will participate in it, depending on how many creditors have an unsecured claim on the debtor’s property. During the meeting, the trustee will ask some questions to the debtor regarding their economic situation and due payments. They will discuss:

  • The consequences of filing for bankruptcy
  • The debtor’s ability to file a petition under a different chapter
  • The effects of receiving a discharge of debts under Chapter 7
  • The effect of reaffirming a debt

The trustee will also give the debtor the option of changing chapters, as long as they are eligible for the chapter of their choice.

After the meeting

Ten days after the meeting of the creditors, the trustee will report to the court if the debtor’s specific case complies with the means test. Passing the means test is necessary to be eligible for Chapter 7 bankruptcy. If the person is eligible, the trustee will collect some of their nonexempt property to repay their debts.

Protection for the debtor

It is essential for a debtor to attend the meeting, as failure to do so can result in the dismissal of their case. Besides, the meeting is important as that’s when the debtor gets information about the overall process of bankruptcy. Filing for bankruptcy may seem scary, but it may be the best solution to get rid of creditors and discharge most debts.