What To Expect at a Bankruptcy Hearing

The stigma associated with bankruptcy is completely unwarranted. Bankruptcy is a sensible solution to consolidate debts and reestablish financial security for you and your family. Much of the hearing involves counseling with the judge to determine the best balance of your practical needs given your financial situation. As such, it is best to be very honest and transparent about your finances.

What Is A Bankruptcy Hearing Like?

If you are filing for Chapter 7 bankruptcy, you will not have to appear before a judge unless there is an objection to your claim or you desire a reaffirmation hearing. A reaffirmation hearing is held only when a debtor wants to hold on to some debt in order to maintain ownership of the property tied to it. For example, if a debtor’s father is elderly and dependent on the debtor to drive to the pharmacy to pick up medications, then a debtor would have a reason for reaffirming a car that otherwise would have been auctioned off.

In a reaffirmation hearing, the judge will inform the debtor of the consequences of reaffirming debt. A debtor will be liable for the full amount of a reaffirmed debt, so it may be an unwise decision if the debtor foresees financial troubles in the near future. The judge then informs the debtor of alternatives to reaffirming, such as redemption and surrender.

What is a Meeting of Creditors?

After the reaffirmation hearing, the individual filing for bankruptcy will attend the meeting of creditors. Ideally, all of a debtor’s credits will appear and examine the debtor to ensure that all of the information on the bankruptcy papers is correct. Creditors are usually too busy to attend the meeting of creditors unless they have strong suspicions of fraud or hidden assets. If creditors are present at the meeting, a debtor should not worry. Creditors are only permitted a brief period of time to question the debtor, and they are only allowed to ask about the locations and values of assets.

In the likely event that the creditors cannot attend the meeting, a bankruptcy trustee will cross examine the debtor under oath. The bankruptcy trustee will ask the debtor questions about all of the information on their bankruptcy papers. It is best for the debtor to be honest and straightforward to expedite the process. If all of the information on the bankruptcy papers is correct, the hearing is concluded. If further information is required, a time and date will be set for a future hearing. However, as long as the debtor can gather the necessary information in a timely manner, the bankruptcy trustee will usually take the information and make the necessary changes to the bankruptcy papers without needing a bull blown hearing.

Who Can Help Me Prepare For A Bankruptcy Hearing?

The ease of a bankruptcy hearing is contingent on how well prepared you are for the occasion. You should forecast your income for the coming months, calculate the value of any assets that you wish to reaffirm and list all of your asset-dependent practical needs. To make sure that you are asking the right questions and calculating the correct values of your assets, work alongside an experienced bankruptcy attorney. Your finances and your future are too important to risk by going into a bankruptcy hearing without first utilizing all of the resources that you have available.

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