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Written by AskTheLawyers.com™ on behalf of David Shuster with Shuster Law, PLLC.
Bankruptcy has a negative stigma that is entirely unwarranted. Bankruptcy is a service provided by the government, giving you a second chance to start fresh and get back on your feet. You’re not giving up; you’re getting help. However, the 341 creditor meeting can seem intimidating if you’re unfamiliar with the process.
Traditionally, Chapter 7 or Chapter 13 bankruptcy involves the liquidation and agreement of payments to creditors for your debts. Essentially the government assumes responsibility for those debts, either completely removing certain debts or consolidating them into easy payments for you.
That can’t happen, though, until everyone gets together in a meeting designed to work out the details.
This legal process allows you, your bankruptcy attorney, a trustee—and in some cases, your creditors—to review your case. It’s not a trial or an “interview for a job” where if you land it, it’s yours, and if you don’t, you’re out of luck. Rather this is a simple mandatory process designed to ensure that all the details and information in your file are completely accurate. So don’t stress.
In fact, for the most part, this 341 creditor meeting doesn’t take long at all.
Expect the trustee to ask you specific questions about any nonexempt assets that will be liquidated to pay off a portion of your debts before a discharge is issued for Chapter 7. If you’re filing Chapter 13, questions may revolve around setting up a repayment plan. As always when considering finances, you’ll be asked about income and expenses to ensure your monthly payments work out successfully.
Other issues to discuss include child support or spousal support, prior bankruptcy filings, any real estate owned, other lawsuits, and whether or not you own a business. Long story short, to ensure you’re prepared, consult your attorney about anything and everything that has to do with money, and the meeting should be a breeze.
Be prepared for creditors to then ask you questions, too (that is, if they do show up instead of sending their own attorneys on their behalf). By law they have the right to do so. Typically the questions will revolve around certain properties you’ve purchased with credit, such as a house or car. Simply be honest, and remember that your attorney will be with you to help you out.
In fact, do so even before considering to file. You want to be completely prepared with no surprises. That’s the best way to manage the system with no hiccups or stress factors. Get the communication you need. When you’re all through with it, you’ll see that bankruptcy isn’t a burden, but a blessing in the right circumstances.
Written by AskTheLawyers.com™ on behalf of David Shuster
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