Filing for bankruptcy is a legal process and while you will likely not have a lot of interaction with the bankruptcy court during your case there are certain court hearings that you must attend and a few others, depending on the circumstances of your case. The court hearings I am going to go over are specific to Arizona but are generally applicable to other states as well.
The Meeting of the Creditors – Mandatory Meeting that You Must Attend
In every bankruptcy case you are required to attend a meeting where the assigned bankruptcy trustee and your creditors can ask you questions. This description makes this meeting sound a lot more scary than it actually is. In most cases (as in over 90%) the meeting is really between you and the bankruptcy trustee. Rarely do creditors appear. In fact, I have been handling bankruptcy cases in Arizona for over 11 years and I have only had a dozen or two cases where a creditor actually showed up to the meeting of creditors. It simply doesn’t happen that often.
The bankruptcy trustee will ask you questions about whether you were truthful in disclosing all of your assets and if you signed your bankruptcy documents prior to filing them; if you have lived in Arizona for at least two years, and if you anticipate receiving an inheritance anytime soon. The bankruptcy trustee can also ask you questions about your bankruptcy documents that you submitted to the court. In Arizona, this meeting is usually five minutes max and generally not something to lose much sleep over.
Reaffirmation Hearing – Possible You May Have this Hearing
If you owe money on a car and you would like to keep that car there are two things that you must do: first, you must continue to make the monthly payment – even while your bankruptcy case is active. Second, you need to sign a reaffirmation agreement stating that you intend to keep the vehicle and “reaffirm” the loan you entered into. In Arizona the court will often hold a hearing to make sure you understand the implications of signing a reaffirmation and whether or not it is in your best interest. Again, your attorney attends this hearing with you and it usually is no more than five minutes long.
2004 Examination – Possible You May Have this Hearing, but Not Typical
When the bankruptcy trustee asks you questions during the Meeting of Creditors the time is usually very limited. If there are other issues in your case that the trustee has questions on the trustee can set what is called a “2004 Examination”. The number 2004 refers to the bankruptcy rule that authorizes this hearing. In Arizona this is usually held in an office and lasts less than an hour. In most cases it is simply another opportunity for the bankruptcy trustee to get questions answered in more depth or dive into something deeper than the trustee had time for at the Meeting of Creditors.
Adversary Proceedings – Unlikely
In rare cases there will be what is known as an adversarial proceeding. This is sort of a parallel proceeding to your bankruptcy. Typically this proceeding occurs when a creditor is claiming that a debt should not be discharged in the bankruptcy because it was incurred through fraud. Sometimes the bankruptcy trustee will file an adversary proceeding to revoke a discharge in extreme cases where bankruptcy debtors are not compliant with the court’s rules. Again, this sort of thing is very rare.
Regardless of the hearing it is helpful to have an experienced bankruptcy lawyer by your side to help you navigate the bankruptcy court process.
Photo Credit: Douglas Palmer
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