Meeting of Creditors – Law Office of Rick Morin, PC

Bankruptcy Rules, Chapter 13 Bankruptcy, Chapter 7 Bankruptcy, Meeting of Creditors

Don’t Forget Your Social Security Card

Sacramento Bankruptcy Lawyer Rick Morin There is a lot to remember during the bankruptcy process. A very important part of each bankruptcy is the Meeting of Creditors. Are you prepared for yours?

Bankruptcy Meeting of Creditors

At your Meeting of Creditors (sometimes called a 341 Hearing by attorneys), you will be asked some questions. The questions are about your bankruptcy papers and financial affairs. The hearing is conducted under oath by your bankruptcy trustee.

The very first thing that the Trustee will do at your Meeting of Creditors is verify who you are. You can guess why. The court needs to ensure that the person being interviewed is the actual debtor. Why would someone else show up? Trust me, it happens.

The Trustee will request a government-issued photo ID. You are also required to show proof of your social security number. Photo ID is usually your California driver’s license, California ID card, passport, or military ID. Proof of social security number is typically your social security card or your medicare card. Why medicare card? Your medicare card is one of the only other government documents that contains your full social security number.

Why You Need Your Social Security Card

I occasionally see debtors appear at their Meeting of Creditors without one or both of these documents. Most often missing is the social security card. Some Trustees will not conduct the interview without proper paperwork. Others will move forward the interview but require you to come back to court at a later date with the required documents.

If you are like most people, you only want to go to the federal courthouse in Sacramento once. This means that you need to remember to bring your ID and social security card with you to court. Make a note in your calendar or put it in your phone. Don’t forget!

My law firm makes bankruptcy as easy as possible. Please call my office at (916) 333-2222 to discuss obtaining a fresh start with your finances.

April 12, 2016/by Attorney Rick Morin

Bankruptcy Law, Bankruptcy Rules, Chapter 7 Bankruptcy, Meeting of Creditors

What is a Notice of Filing Report of No Distribution?

Report of No Distribution

I am often asked about what a “Notice of Filing Report of No Distribution.” Almost all Chapter 7 debtors will receive such a notice in their Chapter 7 Bankruptcy case. It is an important document that has big implications for your bankruptcy.

As I discussed a few weeks ago, some Chapter 7 cases are “asset” bankruptcies, while most are “no-asset” bankruptcies. In no-asset Chapter 7 cases, the bankruptcy trustee will issue a report that specifies certain information about his or her administration of the bankruptcy.

This “no asset report” is important because it tells all interested parties that there will be no distribution of funds from the debtor’s bankruptcy. A creditor needs this information to know whether they can expect to receive any funds from the bankruptcy trustee.

Once the no-asset report has been issued, the debtor will also be confident that the bankruptcy trustee will not be attempting to seize any of their property. The most common item taken from a debtor in a Chapter 7 is a tax refund. When the report of no distribution comes out, the debtor will know that their case is proceeding without any need for turning over property to the trustee.

The report also contains an important deadline that creditors must follow. The report provides for a “last day to file an objection.” Importantly, this objection deadline is NOT the deadline for a creditor to object to the bankruptcy itself. Rather, it is a deadline for creditors that want to object to the trustee’s no distribution report itself. Many clients confuse this deadline with the deadline for creditors to object to the bankruptcy or the discharge of specific debts.

Please contact Sacramento Bankruptcy Attorney Rick Morin for more information regarding Chapter 7 or Chapter 13 bankruptcy. The office phone number is (916) 333-2222.

March 25, 2015/by Attorney Rick Morin

Bankruptcy Law, Chapter 13 Bankruptcy, Chapter 7 Bankruptcy, Meeting of Creditors

4 Surprising Questions You Might Be Asked at Your Bankruptcy Hearing

For most debtors, the bankruptcy hearing is the most daunting part of the bankruptcy process. Whether you are filing Chapter 7 or Chapter 13 bankruptcy, each debtor is required to appear in court for a “meeting of creditors.”

As I have discussed in the past, the meeting of creditors is an opportunity for the Bankruptcy Trustee and your creditors to ask you questions regarding your financial affairs. Most hearings go well and are done in a matter of minutes. But not always!

Here are four questions that tend to surprise people during a meeting of creditors.

1. Did you disclose all property that belongs to your non-filing spouse?

A married couple is not required to file bankruptcy together. One spouse may file bankruptcy and the other spouse is not required to file. However, because California is a community property state, the debtor must disclose all property owned by both the debtor and his or her spouse. By not disclosing all property owned by the non-filing spouse, the debtor would not be able to “exempt” that property. This means that the property of the non-filing spouse may be subject to liquidation by the bankruptcy trustee!

The lesson here is to list all property owned by either spouse.

2. Have you paid any money to family in the past year?

Money paid to family in the 12 months prior to the filing of the bankruptcy (and sometimes longer too!) can be recovered by the Bankruptcy Trustee. Some debtors don’t think that it is important to disclose payments to family on debts. This is because the debtor intends to repay the family member after the bankruptcy. This can cause a lot of trouble for a debtor in a bankruptcy. All debts, even debts that a debtor intends to repay after the case, must be disclosed to the court.

The lesson here is that if you have repaid a family member a loan prior to the filing of a bankruptcy, you must discuss this with your attorney. There are plenty of options here, but it must be discussed prior to the filing of your bankruptcy!

3. Why are you filing bankruptcy?

Most Bankruptcy Trustees don’t ask the reason behind your bankruptcy filing. But some do! Make sure that you have a concise, easy-to-understand answer to this question. You might be surprised by some of the answers I have heard from debtors while waiting in court.

4. Are you entitled to any money such as lottery winnings?

Can you imagine filing bankruptcy and then winning the lottery? It actually happens. In some cases the bankruptcy trustee will have the right to recover these lottery winnings for the benefit of your creditors. Even though this situation sounds unlikely, if it does actually happen, the debtor must disclose recent lottery winnings. Failure to do so can result in the revocation of your bankruptcy discharge, and in some cases, even prosecution!

If you have any questions about filing Chapter 7 or Chapter 13 bankruptcy in Sacramento, please call my office at (916) 333-2222.

January 11, 2015/by Attorney Rick Morin

Bankruptcy Law, Chapter 7 Bankruptcy, Meeting of Creditors

521 Documents: What You Need to Know

Before your Meeting of Creditors, also known as a 341 hearing, a debtor is required to provide certain documents to the Bankruptcy Trustee assigned to his or her case. These required documents are commonly referred to as “521 documents” because the requirement is listed in a few parts of 11 USC § 521.

Let’s start with an anomaly here in Sacramento: pay advices.

11 USC § 521(a)(1)(B)(iv) requires that the debtor file 60 days of payment advices (a fancy way of saying pay stubs) with Bankruptcy Court along with other required bankruptcy paperwork. Here in the Eastern District of California, local rules actually tell attorneys not to file the pay advices with the Court. Rather, attorneys are directed to file the pay advices with the Bankruptcy Trustee.

This change in procedure for pay advices is a great example of why familiarity with the local rules in Sacramento is so important.

Moving on, 11 USC § 521(e)(2)(A)(i) requires that a debtor file with the Bankruptcy a copy of his or her most recently filed tax return. This is pretty straightforward. However, sometimes I have a client that has not filed taxes recently. This might be because the debtor only receives social security income (not subject to taxation). A simple note to the Trustee explaining the lack of a tax return is sufficient in these circumstances.

A debtor without a recent tax return because he or she just hasn’t gotten around to filing can expect some extra scrutiny from the Bankruptcy Trustee. Make sure you file your taxes on time!

Bankruptcy Trustees here in Sacramento also demand various other types of documents in preparation of the 341 hearing. These typically include recent bank statements, statements for mortgages and retirement accounts, and specific information regarding outstanding domestic support obligations.

It is always a good idea to check with your specific Bankruptcy Trustee well in advance of your 341 hearing. This will allow you to determine exactly what documents the Trustee will require beyond those listed in 521 of Title 11.

Don’t hesitate to call me if you have any questions about the documents you need to file with the Bankruptcy Trustee. I am happy to discuss Bankruptcy procedures. My office phone number is (916) 333-2222.

February 3, 2014/by Attorney Rick Morin

Chapter 7 Bankruptcy, Meeting of Creditors