What Happens at the “Meeting of Creditors”?

09 Aug 2010

When I file for bankruptcy in Orlando do I have to see all those lovely people who have been blowing up my phone at all hours to collect on a debt they say I owe them?

In a few words…almost certainly not!

In what is surely the most poorly described and misleading title in the bankruptcy process, the “Meeting of Creditors” is rarely a meeting of creditors.  What I mean by that is that in the vast majority of bankruptcy cases filed in Orlando, the person filing the case, the debtor, never “meets” any “creditors”!

True enough, the person filing the bankruptcy must attend, usually with his or her lawyer, a Section 341 Meeting of Creditors which is usually held about a month after the case is filed.  This is a mandatory hearing, and the Debtor cannot successfully complete the case until this hearing is concluded.  However, unless the Debtor has a ton of assets, or is appearing on behalf of a business filing for bankruptcy with some assets, then the creditors stay away from this meeting because they know it is a waste of time for them to appear.

Think about it, if someone owed you money, and you knew they had no assets and no means to repay you, would you waste your time by driving to the meeting (or hiring a lawyer to represent you at the meeting), waiting for the case to be called, waiting for the Trustee to finish with his or her questions, and then ask questions of the debtor to which you already know the answer?  No, you wouldn’t, and neither would your creditors.

For almost all Chapter 7 and Chapter 13 cases filed in Orlando, the only participants at the 341 Meeting of Creditors are the Debtor, the Debtor’s lawyer, and the Trustee assigned to the case.  The meeting consists of the Trustee putting the Debtor under oath, asking a few brief questions about the information contained in the paperwork the Debtor filed to begin the case, and then the Trustee concludes the meeting.  In Orlando, 5 to 10 minute hearing is the norm.

What other so called “scary” things about bankruptcy would you like me to talk about?  Feel free to leave your comments below!

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K. Hunter Goff

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