When a bankruptcy petition is filed, the immediate effect is an "automatic stay."
The automatic stay is a mechanism that protects the debtor and the debtor's property from debt collection and property repossession. It prevents creditors from starting and continuing lawsuits and enforcing judgments or property liens that were in place prior to the date of filing for bankruptcy.
However, not all proceedings are prevented by the automatic stay. Such proceedings include child support or alimony payment enforcement proceedings and criminal actions against the debtor.
In addition, some secured creditors (creditors who hold property as collateral for a debt) may seek to "lift the stay" in order to attempt to repossess the collateral which has been secured. The court may allow the repossession of collateral or it may require the debtor to make periodic payments to the secured creditor.
After a bankruptcy petition is filed, the Bankruptcy Court will send the bankruptcy petitioner a notice in approximately ten days after filing. The notice will advise the petitioner of a meeting of creditors to be held before a bankruptcy trustee who has been appointed by the Court to administer the case.
Arrangements have been made for the meeting of creditors to be held at the Second Circuit Courthouse in Wailuku, Maui for bankruptcy petitioners who live on Maui.
The bankruptcy petitioner must appear at this meeting. Joint debtors who have filed joint petitions must appear together at the meeting. Failure of the bankruptcy petitioner to appear at the meeting of creditors will result in the bankruptcy case being dismissed.
What should a bankruptcy petitioner expect at the meeting of creditors?
The trustee will call the bankruptcy petitioner's name and ask the petitioner to come forward and answer a series of short question about their case.
The following questions will likely be asked:
What is your name, address, and social security number?
Have you read the U.S. Department of Justice, United States Trustee, Region XV Information and Guidelines for Chapter 7 Cases?
Did you read the bankruptcy petition, schedules and statement of financial affairs before signing it? Was all the information true and correct? Are there any corrections or changes?
Have you been a resident of this district for at least 180 days prior to the filing of the bankruptcy petition?
Have you ever filed any prior bankruptcy?
Are you informed of the differences between Chapter 7 and Chapter 13 bankruptcy and have you selected that Chapter 7 is the most appropriate to your situation?
Are you aware of the affect that filing bankruptcy may have on your credit?
The trustee will also ask questions to confirm that all assets and creditors were scheduled.
The trustee may also ask the petitioner in bankruptcy to provide certain documents and other information. The documents and information should be presented to the trustee at the meeting, or may be delivered to the trustee at a later date, if requested.
The trustee will then ask if there are any creditors (people owed money by the bankruptcy petitioner) in attendance who want to ask questions of the bankruptcy debtor. More information may be found at Reaffirmation of a Debt by a Bankruptcy Petitioner.
Of course, the information in this article is general only. If you have more questions, I suggest you consult an attorney that practices bankruptcy.
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