Here’s what happens once the case is filed. Within anywhere from seven to ten days the court will send a notice of filing to the debtor, to the attorney, and to all the creditors and co-debtors that are listed on the bankruptcy petition. This is the kind of relief that the debtor is looking for. They’re looking for their creditors to get notified so that they’re not contacted anymore. So they don’t receive phone calls. So they don’t receive future letters on the obligations.

So this is actually a great day when the debtor gets that letter from the court because they know that all their creditors have also gotten that letter or will soon get that letter within a day or two. The letter importantly gives dates. Okay. There’s two important dates here. The first date is the 341 meeting of creditors. This is the date where the debtor and counsel must appear before a chapter 7 trustee to be administered under oath regarding the person’s income, assets, expenses, and information contained in the petition.

This is where the chapter 7 trustee is gonna look to see if there’s any assets that could be taken, administered, sold, and paid to creditors. 99% of the time in a chapter 7 bankruptcy case there are no assets that can be administered to creditors. That’s why the person filed a chapter 7. However, in certain cases a piece of property will show up that the debtor did not notify their counsel about. For example, it might be a piece of land up in Wisconsin that the debtor thought they didn’t have to tell anybody about because it was paid or they didn’t think it had any value.

Well, turns out that that property does have value. Maybe $15,000.00 to $20,000.00 worth of value. It may be enough to pay a percentage of the debt owed to the creditors and the chapter 7 trustee may decide to administer that asset if they can. So very important. The trustee’s gonna examine the debtor under oath. Debtor has to be 100% honest with every question that’s being answered.

Creditors also have an opportunity to appear at that meeting and ask certain questions of the debtor. They can’t ask too many questions otherwise the chapter 7 trustee is going to say, “Bring your own hearing under section 2004 of the Bankruptcy Code.” But typically most creditors will not show. And if they do show they have one or two questions to ask of the debtor to be assured that the debtor has not committed any kind of fraud or is not hiding any significant assets.

See Also: Bankruptcy Lawyers Las Vegas