During the bankruptcy process following the filing of the Chapter 7 petition, debtors must now initiate the 341 Meeting of Creditors. At the meeting, debtors and their bankruptcy attorney must meet with the Trustee of the Courts assigned to the case. In the meeting, all creditors of the debtors have a right to be present, as well pose questions to the debtors. However, in reality, creditors rarely appear at the Meeting of Creditors for individuals filing Chapter 7 bankruptcy. When no assets are distributable, or have been exempted, there is no reason for creditors to appear, as their entity will receive nothing from the filing. In cases of suspected fraud on behalf of creditors, a representative may appear and ask questions. As for the Trustee of the Court present at the meeting, this person will ask debtor’s questions to assess whether or not the individual is an applicable candidate for Chapter 7 liquidation, as well as ensuring there is no property or other assets that are not exempt and must be distributed.
For property a debtor wants to keep, the debtor must continue making payments to all secured creditors. In some events, creditors will cease sending payment reminders to debtors to meet no contact protection requirements as the result of filing for bankruptcy. This is not a reason to stop making payments. The debtor must keep all payments current with secured creditor organizations to retain all property from foreclosure or repossession.
In the following five months after filing for Chapter 7 bankruptcy, the debtor will receive, provided no opposition is made by creditors or complications in the filing, a discharge of all applicable debts. Following the Judge executing the discharge order, debtors have no legal obligation to repay any and all unsecured debts any longer.
Following filing Chapter 13 bankruptcy, creditors will receive notices regarding the filing. In the event filings occurred under emergency, such as a pending judicial foreclosure, a bankruptcy attorney can serve the necessary notifications, effectively stopping all collections actions and preserving property for the time being.
Payments on secured creditor items, such as mortgages and auto loans, still must be paid within the next payment due date for the remainder of the bankruptcy period. Noting the exact date of the filing is critical. The day a payment is due on a mortgage or auto loan following the filing of the bankruptcy petition, the payment must be delivered. Also, one month after filing for Chapter 13, payment to the Trustee is also due. The amount of this payment will be set forth in the Chapter 13 Plan, as determined in the bankruptcy proceedings. A bankruptcy attorney will inform clients where this payment should be sent, as well as the monthly payment amount. Payment to the Trustee for Chapter 13 can only be made in certified funds. Personal checks are not credited, and will be returned. Keeping accurate records of all payments, including dates, of secured lender payments and Trustee payments are essential, as disputes may arise.
Five months following filing Chapter 13, a confirmation hearing will occur. During the confirmation hearing, Chapter 13 bankruptcy cases will either be approved or denied. Bankruptcy Court Trustee’s will examine past payment history since filing, as well as ensure necessary creditors are repaid in full over the course of the Chapter 13 plan. In events where payment ability or creditor claims changes, a bankruptcy lawyer can file amendments to adjust for these changes. Once the Chapter 13 Plan is confirmed, the payment usually remains constant for the remainder of the bankruptcy.