Once a Chapter 7 bankruptcy is filed on the debtors behalf the United States Bankruptcy Court appoints a trustee. The court, upon filing of the bankruptcy, gives the debtor an automatic stay. This is a federal court order which cause all collection efforts against you to be stopped until the bankruptcy process is complete or a creditor obtains a special court order allowing them to continue trying to collect the debt from you.
The Trustee
The bankruptcy Trustee’s job is to investigate the material which was filed on behalf of the debtor. The Trustee will look into the truthfulness of the paperwork that is filed in the Chapter 7 bankruptcy. In the event the debtor has assets which are not exempted under the Bankruptcy Code or under New York State law the Trustee collects these assets which are distributed to the creditors. In the very large majority of Chapter 7 bankruptcies there are no assets to be distributed.
The Creditors Meeting
The Trustee schedules a creditors meeting, sometimes called a 341 hearing. At the hearing the trustee questions the debtor with regard to the material contained in the bankruptcy filing. They will ask the debtor whether they recently inherited money, whether there’s money under someone else’s name that belongs to them and other questions of this nature. The trustee seeks to find out whether the debtor is hiding assets from the court which can be utilized to help pay the creditors. In most situations the bankruptcy case is closed in three to six months. All non exempt debts are discharged which means they are permanently eliminated.
The Law office of Schlissel DeCorpo has been filing Chapter 7 and Chapter 13 bankruptcies for debtors for more than three decades. They can be reached at free consultation at info@sdnylaw.com or can be reached by phone at 800-344-6431.
