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THE BANKRUPTCY HAS BEEN FILED, NOW WHAT?
Once your case is filed there are only a few other duties.
- First – complete the financial management course.
- Second – attend the meeting with the trustee (the creditor’s meeting).
- Third – respond to any requests from the trustee and/or my office.
- Creditors – give any creditors or collection companies your case number and our contact information.
- Let me know if your contact information changes.
- If you filed a chapter 13 – there are lots and lots of duties. See the Chapter-13-flow-chart.
After the bankruptcy petition is filed, the court mails a notice to all the creditors listed in the schedules. The 2005 Bankruptcy Reform Act requires that you send notice to all addresses on any bills, statements, or letters received from any creditor or collection company in the 90 days prior to filing. Therefore, it is very important that you list all the addresses on your schedules, otherwise the creditor will not stop its collection activities. It usually takes a couple of weeks fro the creditors to receive notice of the bankruptcy filing. If you have a creditor that is ready to foreclose on your home, repossess your car or garnish your wages then you can ask our office to send special notice to that creditor.
Only to meet with the trustee. You rarely see a judge, assuming your bankruptcy documents have been properly prepared. You will meet with the trustee between 30 to 40 days after your bankruptcy was filed, you will have to attend the “Meeting of Creditors.” You will be put under oath and questioned about your bankruptcy papers and your assets by the U. S. Trustee. In all probability, none of your creditors will appear at the meeting. If the husband and wife file a joint petition, both must be present or the case will be dismissed.
The bankruptcy trustee is an officer of the court, appointed to review all your documents, research public records for assets you have failed to disclose, gather your non-exempt property and turn it into cash, and use this money to pay their fees, perhaps their attorney and then pay the balance to your creditors. The law gives the Trustee a lot of power. Make sure to comply with the Trustee’s request.
This is a link to the United States Trustee’s Office which shows how much the trustees and their attorneys are paid – you will be very surprised.
The law requires the debtor to cooperate with the bankruptcy trustee in the execution of his or her duties.
The Trustee will most likely request that you give them copies of the following documents: picture identification, proof of social security number, copies of all pay stubs or income statements for 3 periods before filing, copies of all bank or credit union statements for the last 3-4 months before filing, copies of all bills, cancelled checks, and check registers to support your expenses, last two years tax returns, along with W-2’s, homeowners, life and casualty insurance policies, property appraisals, title documents, mortgagee and liens for all real and personal property, divorce and/or support orders.
The Trustee will also request a copy of the next year’s tax return. All tax refunds must be remitted to the Trustee. Do not cash or endorse the refund checks, send them directly to the Trustee. Throughout the process the Trustee may request more information. If you refuse to cooperate with the Trustee, your discharge in bankruptcy may not be granted or may be revoked.
In order to fulfill that law governing bankruptcy you must attend a “hearing” called a 341 creditor’s meeting.
This meeting is at a courthouse, but not in a courtroom and it is not before a judge. This is not an adversarial forum where you will be cross-examined as to why you have filed bankruptcy. Your attorney will be present to help you with any questions. At this meeting you will meet the Trustee assigned to your case and will be sworn to tell the truth. You will also be asked to testify that the documents that you have filed with the court are true and accurate. In addition, this meeting is intended to give the Trustee an opportunity to ask you any questions regarding your documents. Also, any creditors can ask questions, but it is rare to have a credit appear at one of these meetings.
As your attorney, my job is to help you through this meeting and help you to answer questions. A normal creditor’s meeting last between 2 to 5 minutes. Of course, this varies depending on the complexity of your bankruptcy case.
YOU MUST BRING A PICTURE ID: DRIVER’S LICENSE, PASSPORT OR LEGAL RESIDENT ALIEN CARD and PROOF OF YOUR SOCIAL SECURITY NUMBER (YOUR SOCIAL SECURITY CARD, A W-2 FORM FROM THE MOST RECENT TAX YEAR, or A RECENT PAY STUB). FAILURE TO DO SO WILL CA– USE YOUR CASE TO BE DISMISSED.
After the First Meeting of Creditors, the court may issue orders to you and my office. These orders will be sent through the mail and may require that you turn money or property over to the Trustee, or they may require that you provide certain information to the Trustee.
Each client receives instructions to pay all their mortgage and car payments in a way that they can prove those payments were made.
Some clients do not feel it is important to follow my directions. One client that did not paid an additional $350.00 for attorney fees to prove that he made his payments. Another client that followed my directions, paid nothing in additional fees. That client stated the following: “It’s clear that my record keeping made a crucial difference in proving our case – that mortgage payments had been kept current. I’m glad I keep cancelled checks and that I keep a record of what payments were made to specific monthly payments. This information made available the exact information needed to prove that payments had been made as we claimed.”
The Bankruptcy Trustee may take certain items that are not protected under Arizona law (those not listed as exempt property.) If the value of those items is sufficient to justify the Trustee’s time and effort they will hold an auction then the debtor will be asked to surrender the property to the Trustee. The debtor, or their family, friends and other interested parties will have an opportunity to bid on those items. Normally the Trustee requires that the bid price be paid either at the auction or a short time thereafter.
Sample of trustee sale of personal property.
The money from the sale of those items will be paid, first to cover the costs of the sale, then a percentage to the Trustee, then priority debts (such as taxes), then the balance to the unsecured creditors. WARNING AT ALL SALES: *PROPERTY WILL BE SOLD “AS IS, WHERE IS”, WITH NO WARRANTIES OR REPRESENTATION MADE OR IMPLIED. PROSPECTIVE PURCHASERS ARE ENCOURAGED TO PERSONALLY INSPECT / PERFORM THEIR OWN DUE DILIGENCE OF THE PROPERTY BEING SOLD. ALL SALES ARE SUBJECT TO SALES TAX UNLESS THE PROPERTY BEING SOLD IS TAX EXEMPT OR A RESALE NUMBER IS — USED AS PROOF OF EXEMPTION.* (1) The last Friday of each month the Maricopa County trustees hold an auction at 230 North 1st Avenue, Phoenix, beginning at 8:30. (2) Each trustee will have their own auctioneer and process. (3) Checkout www.BKassets.com for list of some of the assets to be sold.
