Archive for the ‘Bankruptcy Law’ Category

Fresno Bankruptcy Help: What Is a Meeting of Creditors In a

Sunday, September 20th, 2009

What Is A Meeting of Creditors In A Chapter 7 Bankruptcy?

In every Chapter 7 or Chapter 13 bankruptcy case, the debtor (the person who files a bankruptcy petition) is required to attend a “meeting of creditors” or “341 meeting of creditors” (341 refers to the United States Bankruptcy Code provision that requires all debtors filing a bankruptcy petition to attend).

In Fresno, the 341 meetings are held at the Fresno Bankruptcy Court House located at 2500 Tulare Avenue, Fresno, California – the meeting rooms are located on the ground floor.

As you enter the courthouse, you will be required to go through the metal detectors staffed by court security personnel – they will direct you to the meeting rooms (about 200 feet from the front door on the right hand side (as you enter).

The most important requirement: They are mandatory! If you fail to appear your case could be continued or dismissed.

The meeting of creditors is conducted outside the presence of the judge and usually occurs 4 to 6 weeks after you file your bankruptcy petition. In chapter 7 and chapter 13 cases, the trustee assigned to the case conducts the meeting on behalf of the United States Trustee.
Some of the biggest mistakes debtors make at these meetings is the failure to provide the required documents prior to the hearing. Required documents include: (1) copy of most recently filed tax return; and (2) copies of pay stubs (also known as “pay advices” for the period 6 weeks prior to filing.

My office is responsible for making sure these documents are filed with the trustee.

Your responsibility is to show up.

The meeting are usually low key and respectful. No one is going to be yelling or screaming at you: “Why are you here?” Why didn’t you pay your bills?” 

The purpose of the meetings is to permit the trustee or representative of the United States Trustee’s Office to review your bankruptcy petition in person. You will be required to answer questions under oath about your acts, conduct, property, liabilities, financial condition as it relates to your bankruptcy. This information enables the trustee or representative of the United States Trustee’s Office to understand the debtor’s circumstances.

It is called the “meeting of creditors” because your creditors are notified, and although your creditors may show up and ask questions about your bankruptcy, they rarely attend these meetings.

This comes as a big relief to a lot of my bankruptcy clients since when first hearing about the “meeting of creditors” they think that everyone of their credit card companies (and their terrorist collection agencies representatives) will be attending to get one last opportunity to harass and upset them. If any creditor attends, they are limited by the law as to what questions they may ask and they must be polite, professional and their questions must be relevant to your bankruptcy.

Fortunately, the meeting of creditors only last 10 to 20 minutes, and is usually the only time you are required to attend court in your bankruptcy case. With my clients, we prepare you during the initial consultation and immediately before the hearing for the potential questions that might be raised by the Chapter 7 or Chapter 13 trustee.

Disclaimer

Fresno-Bankruptcy-Lawfirm.com is owned by the Law Offices of Jeffery D. Rowe. We are a debt relief agency. We help people file for bankruptcy relief under the Federal Bankruptcy Code (Title 11 of the United States Code). If you would like to discuss your situation in further detail, please call our Fresno offices at: (559) 228-1500 or our Merced office at: (209) 722-3700 to schedule a consultation.

Fresno Bankruptcy Conference: Chapter 7 and Chapter 13 Means Test – Clarity To Individual Cases

Saturday, September 19th, 2009

As reported yesterday, the Central California Bankruptcy Institute held their annual Fresno bankruptcy conference, and as usuaul the program was excellent featuring Fresno bankruptcy attorneys and judges presenting legal updates and timely review of important topics for local practioners.

One such presentation was a review of the important and conflicting issues surrounding the bankruptcy Means Test as it applies in both Chapter 7 and 13 cases.

The presenters were bankruptcy judge Honorable W. Richard Lee, bankruptcy attorneys Leonard K. Welsh and Peter L. Fear and Chapter 13 Trustee Michael H. Myer.

The intial presentation included an overview of “The Big Picture”, namely that the goal is the “Debtors should pay what they can afford after reasonable and necessary expenses.”

Prior to 2005, this “reasonable and neccessary” standard was determined by applying “projected income and expenses” as set for in schedules I and J of your bankruptcy petition. Schedules “I” and “J” are parts of your bankruptcy petition that set forth your projected monthly income and expenses.

That anaylsis changed to a more formulistic approach following passage of BACPA. (The major law change in 2005 that began the myth that still exists today that you can’t file bankruptcy — yes, I still encounter this question).

Since Congress was the one who passed this law (obstensibly to stop bankruptcy fraud, but really intended to force more debtors into Chapter 13 repayment bankruptcys — the credit card companies were upset that their debts were getting summarily discharged). 

Interestingly, this has not been the case,  about the same percentage of people who previously qualify for Chapter 7 still qualify today. More over, the law demonstrated that the system was not rife with fraud; nevertheless we are left with the application of the new law to both Chapter 7 and Chapter 13 cases.

The means test formula is more ridgid and unforgiving as it often does not allow for the application of “necessary and reasonable” expenses, but debtors and their attorneys are forced to apply pre-determined (i.e. by Congress and others detached from your real world situation) expenses.

Many of my clients have decried that these “formulas” are unfair since they have no money left each month after paying essentials, but this rigid formula states that they have money left over each month.

Comically, one audience member at the conference blurted out that the new law was  “illegal” – this comment was meant with crickets chriping in the background.

There were alot of perplexed faces in the audience since the law was passed by Congress and signed by President Bush, and has withstood an unprecedented amount of legal appeals seeking interpretation and clarification of its provisions.

So yes, the law is legal, but I still understand the frustration of my bankruptcy clients when they’re told they make “too much” money to qualify for a Chapter 7 bankruptcy.

So despite the frustration by everyday Americans, what did Congress intend? (I’m taking this quotation directly from my bankruptcy conference’s hand-out, so thanks to the CCBA and the authors of this section).

“The report by House of Representatives’ House Committee on the Judiciary stated: ‘The heart of the BAPCPA consumer bankruptcy reforms consists of the implementation of an income/expense screening mechanism (‘needs-based bankruptcy relief’ or ‘means testing’) , which is intended to ensure that debtor’s repay creditors the maximum they can afford. ‘(H. R. Rep. No. 109-31, pt. 1, at 2 (2005), reprinted in 2005 U.S.C.C.A.N. 88, 89.”

The key words for all individuals thinking about or investigating whether they should or can file Chapter 7 bankruptcy (or whether Chapter 13 is a better or only option for them) is to understand that the current bankruptcy law is skewed in the favor of your creditors.

Yes, you can stil file bankruptcy — and a record amount of bankruptcies filed last year,  but it is important to understand that if you’re thinking about filing Chapter 7 you need to qualify under the means test. 

Prior to 2005, the process was easier, but today a through analysis of your financial situation is necessary.

If you should have any questions about qualifying for Chapter 7 under the Means Test, contact my office for a pre-bankruptcy consuling session at the numbers below.

Disclaimer

Fresno-Bankruptcy-Lawfirm.com is owned by the Law Offices of Jeffery D. Rowe. We are a debt relief agency. We help people file for bankruptcy relief under the Federal Bankruptcy Code (Title 11 of the United States Code). If you would like to discuss your situation in further detail, please call our Fresno offices at: (559) 228-1500 or our Merced office at: (209) 722-3700 to schedule a consultation.