Don’t Fear the Creditors at a Bankruptcy Meeting

The U.S. Bankruptcy Code requires that there be a First Meeting of Creditors where the debtor meets with the trustee, who asks him or her questions about the filing, 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 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.

Despite this, the meeting is often a source of stress for debtors, who are used to creditors harassing them, and they are afraid that those same creditors will make the meeting unpleasant. This is certainly not true. Although a debtor 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 the debtor hired an attorney to handle the matter for them, who will be there at the meeting to assist them. 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.

Looking for more information about bankruptcy? Get the answers to the most frequently asked questions by downloading my free book, Top Questions People Ask About Filing Bankruptcy in New Jersey. It will give you the answers you need all in one place. Then call me at 888-857-8418 or contact me through this site for an appointment for a free consultation to discuss your case.