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After you have filed your bankruptcy petition, whether a chapter 7 or chapter 13, the bankruptcy trustee will schedule a meeting of your creditors, referred to as a 341 meeting after the number of the bankruptcy code associated with the meeting. This 341 meeting typically takes place about 30 days after your filing.
At the 341 meetings the bankruptcy trustee, or administrator, will ask any questions they have about your petition. They are trying to determine any problems or missing information, and if you have included everything or may be trying to hide information. If the trustee believes there are issues they can schedule an adversary proceeding in court. Your creditors can attend the meeting, but they don’t need to in order to file a claim or object to discharging the debt you owe them.
Most 341 meetings are fast and easy. Some of the questions the trustee may ask you are:
Did you include all of your property and assets?
Did you include all of your debts?
Did you read everything before signing the petition?
Do you have any mistakes you need to correct?
Do you owe child support or taxes?
Is everything accurate in your petition?
If anything is missing or the trustee needs additional information such as business records, they may continue the hearing to give you time to produce the information.
If your creditors are there they will be given a few minutes to as you questions as well. If they need more information another hearing will be scheduled.
Once the 341 meeting has been completed, if there are no issues, the trustee will be into motion the bankruptcy discharge.
Many consumers consider filing chapter 13 bankruptcy in order to protect their home or other property, because they have too much disposable income according to the ch 7 bankruptcy means test, or because they believe they have a responsibility to repay their debts. There are only a few requirements a consumer must meet in order to be eligible to file a ch 13:
Individuals Only
Only individuals can file a ch 13, they can file separately, together with a spouse, or as a single filer. Filers may be self employed, employed, or operating an unincorporated business. A corporation or partnership business is not eligible to file a chapter 13 bankruptcy.
Unsecured and Secured Debt Amounts
An individual or couple filing ch 13 must have less than $336,900 in unsecured debts, and less than $1,010,650 in secured debts. These amounts do change according to the consumer price index, but these are the numbers as of the writing of this article.
Dismissed Bankruptcy
If you have a bankruptcy that was dismissed within the last 180 days due to failing to appear before the court, failure to comply with court orders, or you voluntarily dismissed a petition after your creditors tried to recover property through the bankruptcy court for which they have liens, you are not eligible to file a chapter 13 bankruptcy.
Credit Counseling
In the 180 days before filing a ch 13, you must complete credit counseling through a bankruptcy court approved credit counseling agency. (There are emergency exceptions and areas where there are not enough agencies to handle the counseling.) If the credit counseling agency develops a debt management plan, it must be filed with the court along with your bankruptcy petition.
If you meet the above criteria then you are eligible to file a chapter 13 bankruptcy petition.
Filing a chapter 13 bankruptcy can help you stop foreclosure proceedings and help you keep your home.
A ch 13 is a repayment plan, combining all of your debts and determining how much of your income you can pay each month in order to pay off all or a portion of your debts. If you are facing foreclosure and owe back mortgage payments you can include this debt in the bankruptcy filing.
The bankruptcy trustee will then determine your ability to make monthly payments and approve or disapprove your debt plan. If approved, you will make your mortgage payments, and your monthly bankruptcy payments will be used to payoff the past mortgage payments you owe plus your other debts. Of course in order for this plan to work, you do have to have enough income.
If you do not make enough money to have a chapter 13 payment plan accepted, you may be forced into a chapter 7. This doesn’t necessarily mean you will lose your home to foreclosure. In a chapter 7 you can reaffirm your mortgage debt, and since most of your other debts will likely be discharged, you will probably have more income available to go towards your mortgage.
There are currently bills in congress to allow bankruptcy trustees to change the terms of mortgages for those in the bankruptcy process in order to stop foreclosures and create more realistic mortgage payments. As of this writing, those bills have not been passed into law. You can also negotiate with your mortgage company to avoid foreclosure while filing bankruptcy.