Word of the day: meeting of creditors

About one or two weeks after filing for Chapter 7 bankruptcy, the debtor (and all the creditors listed in the petition) will receive a notice that a creditor’s meeting has been scheduled. The debtor is required to attend this meeting, which usually occurs one month after filing. Even though it’s called a meeting of creditors, the creditors rarely attend.

During this meeting, a court appointed bankruptcy trustee reviews your forms and asks questions about any information that needs further explanation. If you have any nonexempt property, you must give it (or its cash equivalent) to the trustee.
The trustee’s duty is to see that the debtor’s creditors are paid as much as possible toward what is owed. The more assets the trustee recovers for the creditors, the more the trustee is paid.

RELATED: Dealing With Debt When Creditors Come

The trustee (or the trustee’s staff) will examine the debtor’s paperwork to make sure it is complete and to look for any nonexempt property that can be sold for the creditors’ benefit. Also, the trustee will look at any transactions made during the previous year to see if any can be undone to free up assets to distribute to the creditors. In most Chapter 7 cases, the trustee finds nothing of value to sell.

Source: Institute for Financial Counseling

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