BANKRUPTCY REVIEWS

Chapter 7 Trustee Meeting

THE CHAPTER 7 CREDITOR MEETING

The chapter 7 or 13 creditor meeting is the only time you have to appear anywhere in the course of your bankruptcy filing. It is a mandatory meeting so you cannot stay at home while an attorney represents you in court. What exactly happens at the creditor meeting and what does a lawyer do there?

What exactly is the role of an attorney at the trustee hearing?

None!

In consumer cases, the creditor meeting or the trustee hearing as it is called, is not really a meeting of creditors. The concept of creditors meeting is a carryover from chapter 11 corporate cases where creditors actually meet to discuss the chapter 11 case. In consumer chapter 7 and chapter 13 cases, creditors do not show up and there is no physical setup for a meeting. 

This is so much so the case, that there is no physical set up to accommodate even a single creditor. There is a chair and desk for the trustee but no standing or seating arrangement for creditors. It is as if they do not ever expect to see any creditors, and so do not even set up the physical space to accommodate them.

The creditor meeting is therefore a one-man show - the trustee's and even with that, it is largely a formality.

The bankruptcy judge is not permitted to attend the hearing. The creditors do not show up to ask the debt anything. The hearing simply serves to formally allow the trustee to inform the debtor of his or her rights and to get clarification from the debtor on any issues in the bankruptcy documents that may be of note.

For most people, the hearing is usually finished in under a minute or two. Very often the debtor is asked if the documents are truthful and if they are sure that bankruptcy is what they want. If the debtor answers yes, the hearing is over.

If a debtor is accompanied by a lawyer, the lawyer is not allowed to speak for the debtor. In fact, this is built into bankruptcy rules since the filing of bankruptcy is an administrative process much like applying for social security disability or applying for a driver's license.

The mere filing of a bankruptcy does not constitute a law suit. It is not an adversarial process, so there is no role for an attorney. One would not take an attorney to represent them when they go to apply for auto registration at the DMV and the same applies to the trustee hearing. If you were to go to the DMV with your attorney, they would not kick him or her out but they would still not talk to them unless the applicant has been declared incompetent and cannot speak himself.

Inexperienced bankruptcy lawyers attending the trustee meeting for the first time sometimes attempt to speak for the debtor and are almost immediately shut down by the trustee. Attorneys are allowed to speak at the hearing when it comes to procedural matters such as rescheduling the hearing if the trustee deems it necessary to continue the meeting for another day. Trustee hearings are seldom continued for another day if the debtor is present. A continuance is likely to occur if the debtor is ill and cannot attend, or if they own a business and did not come prepared to tell the trustee about the business.

There is however one benefit to having an attorney at the trustee hearing. Trustees, who themselves are attorneys too, grant their fellow attorneys professional courtesy and allow their clients to go first at the hearing. 

So if you do not mind waiting another half hour at the hearing for your name to be called, an attorney would be of no value to you there.

The only real role for a bankruptcy attorney in a consumer case is to give the debtor legal advice. In most consumer cases, there is no need for legal advice since very often, the only significant issue is whether or not to file bankruptcy. The rest is just preparing the documents and going to the trustee meeting.

For this reason and considering the high cost, we do not recommend that debtors hire lawyers for consumer bankruptcy filing.



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