When it comes to filing bankruptcy, many debtors fear the dreaded meeting of creditors. I don't think that individuals filing for bankruptcy are worried about meeting the creditors as much as they are meeting the bankruptcy trustee. Everyone filing Chapter 7 bankruptcy will have a trustee appointed to oversee the entire process. Their main role is making sure that the debtor has listed all of their assets and debts on the debtor side. And for the creditors, distribute any nonexempt property of the bankruptcy estate to the creditors. At the 341 meeting, the debtor will have the experience of meeting the Chapter 7 bankruptcy trustee for the first time. Not to worry though, as long as the debtor understands what the trustee does, the whole process will go much smoother.
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First of all, an individual filing for bankruptcy should know how the bankruptcy trustee gets paid. The Chapter 7 trustee gets a small portion of the debtor's bankruptcy filing fee to review the petition and conduct the 341 meeting. Typically, nationwide the trustee receives a fee of $60 to review the bankruptcy petition. This also includes the requirement of reviewing the debtors pay stubs, bank accounts and tax returns. In some cases, they will be required to evaluate a piece of real estate or other property value that is nonexempt.
The trustee has to complete the review prior to the meeting of creditors and if they have any questions they will ask the debtor filing bankruptcy at this time. After the meeting of creditors the Chapter 7 trustee will decide if there are any nonexempt assets to distribute amongst the creditors. If there are no assets of value the trustee will conclude that it is in no asset case. This would be a good time to explain. Let's get something straight, the bankruptcy trustee is not this big evil person trying to gather up and take all of a person's belongings and sell them for profit. In fact, in most Chapter 7 bankruptcy filings these days rarely does the debtor lose any property. If the debtor uses a bankruptcy attorney to make sure that as much property as possible is protected with the bankruptcy exemption laws they will rarely lose anything at all. On another side note, with the current economic situation in the United States is suffering these days, property has become very hard to liquidate and the values are a lot lower. The bankruptcy trustee will have to weigh out the cost and time it takes to sell property and see whether it's worth their while even if it's nonexempt.
Basically, if the bankruptcy attorney for the debtor makes sure that the debtor has been totally honest with the bankruptcy court the entire process will move quickly especially in a no asset case. If there are some assets that are questionable, it's best for the individual filing bankruptcy to be upfront with the bankruptcy attorney and the trustee to possibly work something out. Often times, when there are nonexempt assets involved, the individual can give the bankruptcy trustee documentation of their value and negotiate to buy them back from the bankruptcy estate.
All in all, filing for bankruptcy is for honest hard-working debtors that have fallen on hard times. When bankruptcy was enacted it was intended to give these individuals a fresh start. Being upfront and honest with the trustee and the court will quickly get the individual on the road to becoming debt-free.
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