MEETING OF CREDITORS

Typically 30-45 days after the case is filed,  a meeting of creditors is held. Debtor must attend the meeting of creditors and testify as to his or her case under oath. The trustee, U.S. trustee,  and creditors have the right to question the debtor about the facts of the case.  11 U.S.C. § 343. The trustee will normally seek to verify and clarify the information provided in a debtor’s petition. Most trustee’s also have a set of interrogatories or questions that the debtor must complete before or on the day of the meeting of creditors to go along with the answers put on the record. For most debtors, the meeting lasts about ten (10) minutes.

If the trustee is satisfied in the debtor’s responses and find that there are no assets available to pay off creditors, then he or she will conclude the meeting. Otherwise, a meeting will be held open or even debtors may be required to return for further examination and submission of requested documents. Most trustees, in my experience, will take detailed written explanations and documentation to resolve issues before calling for a second meeting of creditors.

In Maryland, meetings of creditors are held in the U.S. District Court House in Baltimore, in Greenbelt, at 6305 Ivy Lane (not the Courthouse building), Hagerstown and Salisbury.

Conversion

Debtors can convert a chapter 7 case to a case under chapter 11, 12, or 13 (6) as long as they are eligible under the new chapter. But this right is limited to avoid debtors repeatedly converting from one chapter to another.

After the trustee’s investigation is complete, then he or she issues a no asset report for the cases where a debtor has nothing that can be used to pay back creditors. In the report, he or she will list your assets and liabilities along with an explanation that there is nothing that can be taken to pay down your debt.For cases where assets are found, the parties can work out agreements on how disposes of or pay the trustee any nonexempt equity in the property.

Financial Management Course

Debtors must take the financial management course before an order of discharge can be entered. This takes about an hour and a half to complete and can be done online, over the phone, or in person. Costs vary, with some programs being as little as $10.00. Live classes are the most expensive.

Discharge

An order of discharge in a chapter 7 case occurs 60 days after the meeting of creditors. This refers to an order holding that the debtor is no longer personally responsible for certain debts. Because not all debts can be discharged, debtors may still be subject to debts such as income tax, student loans, and alimony.

An order of discharge in a chapter 13 case occurs after the debtor has completed the plan or paid 100% of the debt, whichever occurs earlier. Debtor must file an affidavit requesting discharge.

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