Your Chapter 7 bankruptcy case is filed. Now what?
Now that your case has been filed, you can breathe a little easier. Upon case filing, federal law protects you from most creditor actions including:
• Lien creation or enforcement (i.e. garnishments, foreclosures, etc.)
• Collection calls, letters, demands, etc.
• Setoffs, and
These protections come from 11 U.S.C.§362, which is a provision of federal law also known as the Automatic Stay. The Automatic Stay is a temporary injunction and will remain in place until your discharge is entered. In some instances, such as if you are behind on your mortgage or car payment, the lender can seek to have the automatic stay lifted, so that they can repossess the collateral or foreclose their lien on a home.
The Automatic Stay may also be limited to 30 days (or not go into effect at all) if you have had one or more previous active bankruptcies within the last 12 months. If this applies to you, speak to your attorney, as you may be able to get the Automatic Stay extended if you have compelling reasons for consecutive case filings.
If you are currently under a wage garnishment, please remind your attorney to send a notice to your employer of the bankruptcy filing. You will need to follow up with your employer to confirm that they have received what they needed to stop your wage garnishments. Communicate with your attorney if you are having issues with your employer.
Even though your case has been filed and you are now enjoying a reprieve from collectors, you still need to remain active with your case. Within 2-3 weeks after your case has been filed, you will receive a letter from the bankruptcy trustee where the he/she will request documents and information from you that is needed in advance of your §341 Meeting of Creditors.
Many of the documents requested by your trustee are identical to the documents you supplied your attorney pre-filing. You must re-send any requested documents to your trustee directly. Do not assume that your attorney is sending these documents. In most cases your attorney will not even receive a copy of the letter that the trustee has sent you. If you need help with the trustee requests, reach out to your attorney right away after receiving the letter. Please note that most trustees require receipt of the requested documents 1-2 weeks prior to the §341 Meeting of Creditors. If you fail to timely comply with these requests, your case could be delayed or dismissed.
§341 Meeting of Creditors
Upon your case filing, your attorney should have sent you information regarding the date, time and location of your meeting of creditors. You are expected to make arrangements with your employer, so that you can take the necessary time off to attend this meeting. This should be treated as a Court hearing. You are provided with about a 40-day notice of the meeting to give you ample time to make arrangements. The Court schedules the days and times of the meetings, which cannot be changed unless you have exceptional reasons (i.e. health emergency, mandatory out of town employment, etc.). Your attorney will be present with you at this hearing.
You are required to present a photo ID and original proof of your Social Security Number. This is typically accomplished by presenting a driver’s license and your social security card. Please note that a birth certificate will not be accepted, and passports will only replace your ID, but not your social security card. If you have lost or misplaced your Social Security card, the trustee will accept an original W-2 or 1099, so long as your full name and social security number are listed on these documents.
Most §341 Meeting of Creditors last about 5 minutes per case. But, plan to be at the Court for about an hour. When your name is called you will present your ID’s to the trustee and be sworn in. The trustee will ask you questions about how long you have lived in Arizona, whether you have filed for bankruptcy before, whether you listed all of your assets and debts, etc. The trustee may also have questions about large transactions in your bank accounts or information gleaned from your tax returns or bankruptcy schedules. Do the best that you can to answer these questions. Remember that you are under oath and your testimony is taken under penalty of perjury. If you do not understand a question or are unsure how to respond you may turn to your attorney for assistance.
It is not uncommon for the trustee to request additional documents and information. If applicable, you will be provided with a list of additional items the trustee still needs from you. It is important that you continue to comply with every legal request that the trustee makes of you.
There is no formal dress code for these meetings. But, we recommend a business casual attire. If you are coming to the Court straight from work, it is okay for you to come with your work uniform.
After §341 Meeting of Creditors
If you have not already done so, you have 45 days to complete your Second Credit Counseling course. Failure to timely complete this course may result in your case being closed without a discharge. You are responsible for any case re-opening filing fees and legal fees. Get it done early, so you do not forget.
If you are paying the Court filing fee through an installment plan, then your first payment is likely about a week after your Meeting of Creditors. Make sure that you comply with the Court ordered installment plan. If you miss the deadlines your case may be dismissed. Pay it off early if you can.
Assuming you have completed your second counseling course, taken care of all filing fees and there are no creditor objections, then your case can be discharged within 60-90 days after §341 Meeting of Creditors. The Court will mail you a notice of the discharge once it is entered. To learn more about how a discharge works, click here.