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 Sort of Questions Does the Trustee Ask in A 341 Meeting?
The questions involve broad information in your petition, including assets, debts, income, expenses and transfers or transactions. This is one of the differences between a 341 meeting in a chapter 7 and a chapter 13. In a chapter 7 341, the chapter 7 trustee is really more interested in assets and less interested in income and expenses. It doesn’t mean that he or she cannot ask questions about income and expenses, but really the focus of a chapter 7 341 is to verify that you’ve disclosed all of your assets and that you’ve given a good faith, reasonable estimation of what the values are, so the trustee is going to focus a little bit more on the assets. However, that doesn’t mean that they are going to go item-by-item through your petition and ask you about every single thing.
If you’ve got, for example, a wedding ring that’s particularly valuable or if the trustee looked at your property tax information online and saw a very different value for your house than what you reported in your petition, he or she might say, “Okay, you listed a value of X for your house: how did you come up with that value, because we were looking on the property tax website and we’re seeing a value of Y.” If the trustee isn’t satisfied with the answers at the meeting, he or she might send a follow-up letter to your attorney saying, “I’d like to see some documentation that backs up the value you gave,” and that’s really where the rubber meets the road in terms of the quality of the attorney that you’ve hired to do your case.
Is your attorney someone who has done the minimal amount of work on your case and basically just thrown down the number that was easiest because he came up with the property tax statement, or does he have enough skill and experience to say, “Hey, your particular home and the amount of potential equity in it might be something that could be a cause for concern. So let’s make sure we have all the documentation before we file your case, just in case the trustee pushes back on this valuation. That way, we can satisfy the trustee that the numbers we’re using are accurate and not get into a dispute with the trustee.” So the chapter 7 trustee is really focused more on assets and transfers, such as if you sold or gave anything away, especially to a friend or relative, in the period before your bankruptcy was filed. This doesn’t mean the trustee is going to hammer on every little detail, but that’s generally where their focus is for the five to ten minutes of the meeting.
In a chapter 13 341 meeting, the trustee’s focus is more on what your monthly budget is and how much you can afford to pay into a chapter 13 plan. So even though they do ask questions about assets, their focus is less on assets and more on monthly income and monthly expenses. So a chapter 13 trustee spends more time in a 341 verifying, “Are you still making this amount of income? Have you had any reductions in your monthly expenses for your mortgage, daycare and your car payment or are they still accurate?” The trustee may ask for documentation for certain things that he or she may consider high or unreasonable.
At the end of the day, the trustee just wants to verify that the information is correct. This doesn’t mean they are going to go over everything with a fine-tooth comb and make you provide every single document that relates to every single asset or expense that you have. But when there are questions about those things, sometimes those issues can come up.
What Happens After The 341 Meeting Of Creditors Is Over?
The court will give the creditors an opportunity to bring any objection that they may have to your getting rid of their particular debt. In a chapter 7, that’s a 60-day window, in general, after the meeting of creditors. Even though the court gives the creditors that 60-day window, it’s actually rare that those objections come up. This is where your decision of who to hire to do your bankruptcy really can make it a lot more smooth for you because if you’ve got an attorney who has the knowledge, skills and abilities to handle your case well, they have asked you the right kinds of questions to make sure that if there are grounds to these objections, you’ve taken steps to either minimize the risk of the objection before your case was filed, or you set up a strategy to deal with those objections.
In my cases, the objections are actually fairly rare. One place where they do come up is, for example, if you are collecting unemployment while you were employed, part-time. If you are collecting unemployment benefits while you’re receiving employment income, the Department of Economic Development expects you to pay those unemployment benefits back, so that then becomes a debt to the state. Once you file bankruptcy, the state will file an objection to your discharging that amount of unemployment benefit debt in the case, and they base that on the grounds of fraud under the Bankruptcy Code. The best we can do when the state can prove fraudulent grounds, is to settle the debt with the state and get a payment plan set up for our client to resolve the unemployment benefit debt.
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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.