Many people contemplating bankruptcy have heard about something called the "First Meeting of Creditors." What is it? Will my creditors be there? What will happen? Well, here's what to expect.
What Is the First Meeting of Creditors?
The U.S. Bankruptcy Code requires that there be a First Meeting of Creditors where you meet with the trustee assigned to your case. That trustee will ask you questions about your case, along with any creditors who may appear.
For chapter 7s in New Jersey it occurs about 45 days after the bankruptcy is filed; for chapter 13s, around 30. Although this meeting is to allow creditors to appear and ask questions, they rarely do so, and it is mainly the trustee who is asking the questions and going over the petition. I tell my clients that creditors appear less than 5% of the time, and that is certainly true in other jurisdictions.
Why Don't Creditors Appear?
Why don't they appear? Because they are fully familiar with the bankruptcy laws and know that in the vast majority of cases, the debts get discharged, and creditors never get paid.
Even where there might be an argument against dischargeability, they know that the costs and fees of fighting would not be worth it; debtors are in bankruptcy because they do not have the money to pay their debts. Thus the likelihood of them ever seeing a dime is rather slim.
Should I Be Worried About This Meeting?
Despite this, this meeting is probably acting as a source of stress for you, having had experience with creditors harassing you, and you are afraid that those same creditors will make the meeting unpleasant. This is certainly not true.
Although you should prepare for the meeting and be ready to answer the trustee's questions under oath, it is not something that should be feared, especially if you hired an attorney to handle the matter for you, who will be there at the meeting to assist you.
It also usually lasts only a few minutes, and debtors end up spending more time waiting their turn to meet with the trustee (many other cases are scheduled for the same time) than taking it.
So What Should I Do?
The best thing to do to reduce stress in a bankruptcy is to hire an attorney to assist you. If you live in southern New Jersey and are considering filing bankruptcy, please feel free to call me at 856-432-4113 or contact me through this site for a free consultation in my Woodbury office to discuss your case.
If you are looking for more information about bankruptcy, then download my free book,Top Questions People Ask About Filing Bankruptcy in New Jersey.