A reaffirmation is an official way to “reobligate” yourself on the loan. This involves the lender sending us a reaffirmation contract to be signed by you.
What Are the Specific Duties of A Trustee in A Bankruptcy?
The trustee has a duty to conduct due diligence, and that basically means reviewing the documents that are filed by the debtor and then holding a hearing called a Section 341 hearing in which the trustee asks some standard questions of the debtor. At the 341 hearing, the debtor to testifies under oath about the information in his/ her petition. The trustee also has a fiduciary duty to the bankruptcy estate, which is to ensure that the trustee is using his or her best efforts to reasonably obtain assets that are not otherwise protected under the bankruptcy laws.
While that may sound scary, the exemptions are actually quite generous and unless you’re claiming an exemption which you have no right to claim or the trustee has some serious doubts about the value that you’re expressing for a particular asset, the trustees by and large don’t object to the exemptions of the assets as long as you’ve hired a good bankruptcy lawyer who knows what is acceptable and what is not acceptable. That way, you can protect your assets. Even though the trustee is charged with the duty of getting money for your creditors, the trustee is bound by laws as well. The bankruptcy laws are attempting to reach a balance between the rights of the debtor and the rights of the creditors.
What Documents Does The Bankruptcy Trustee Expect To See Prior To The 341 Meeting Of Creditors?
There are a few documents that you are required to provide to the trustee before the 341 hearing and at the 341 hearing. Under the bankruptcy rules, you are required to provide to the trustee a copy of your most recently filed federal tax return at least 7 days prior to the date of your 341 hearing. At the 341 meeting, there are four documents you must also present to the trustee. You have to have valid identification, which is most commonly a driver’s license. You have to have proof of your social security number, which is most commonly your social security card. You also have to provide bank statements showing what your bank account balances were on the date your bankruptcy was filed, because the amount that you had in your bank accounts on the date of filing is considered an asset. The trustee needs to verify that the balances you claimed for your bank accounts are true and correct. If you’re employed, you also must provide your most recent pay stub to the trustee at the 341 hearing.
In the past few years with technological developments, a lot of trustees have asked for the bank statements and pay stubs to be provided along with the tax returns at least a week prior to the meeting itself, and so what happens now is typically we request the bank statements, the pay stubs, and the tax returns prior to the meeting. We submit all of the documents at least 7 days prior and then the client will provide their driver’s license and social security card at the meeting. Those are the default documents. However, the trustee may decide that in order to discharge their duty to do a reasonable inquiry in your case and conduct due diligence, they may also need additional documentation.
If there was an asset you had scheduled and the trustee wasn’t sure how you had determined the value and wanted some kind of supporting evidence, he or she may ask for pictures of the assets. So for example, if there was a motorcycle, pictures of the motorcycle or a printout of whatever online resource you used in order to serve as the basis for the valuation, or a written estimate if that was what you had stated was the basis for your estimated valuation. The trustees certainly have the opportunity to request additional documents beyond what is required by the bankruptcy laws and sometimes trustees do exercise that right. As a debtor in bankruptcy, you have a duty to respond to any reasonable inquiries from the trustee.
If the trustee is asking for extra bank statements, pictures, copies of titles, and things like that, you have a duty to provide that to the trustee. Again, if you’ve hired a good bankruptcy attorney, the bankruptcy attorney has probably already asked for this information from you anyway, so when the attorney gets the request from the trustee, they typically have 90% of what the trustee already wants. But again, these aren’t terribly common. They do happen, and I would not call them rare, but they are not part and parcel of every single case.
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Chapter 13 is essentially a payment plan that you organize through the court system. Think of it as a consolidation loan with teeth.
There are 2 things you must do after your case is filed: (1) attend the meeting of creditors (aka the 341 hearing); and (2) complete a debtor’s education course via phone within 75 days from the date your case was filed. The 341 hearing is sometimes referred to as the meeting of creditors because your creditors can attend the meeting and ask you questions about the information contained in your petition.