When it comes to the process of applying for bankruptcy, many people are unfamiliar with the steps required of them and what they need to have prepared if they are facing serious financial crisis. As a general rule, the more prepared an individual is prior to the bankruptcy filing, the easier the entire process will be.
While many people may understand that they need to file an application for bankruptcy and may be able to choose between Chapter 7 and Chapter 13 bankruptcy plans, many are unaware that they may be asked to attend a meeting with their creditors to discuss their bankruptcy case.
The first meeting of creditors is often referred to as the "Section 341 Meeting" named after the section in bankruptcy code that allows for such an event to take place. It exists to allow creditors an early opportunity to discuss the bankruptcy filing with the debtor. Although it is not required, many people often choose to appoint an experienced bankruptcy attorney to help represent them through the process, and having legal representation at the Section 341 meeting may be particularly helpful.
The meeting allows creditors to ask questions and plan for the bankruptcy process. Although they are not required to attend, they may show up to the meeting to ask questions of the debtor or simply observe the proceedings. A Trustee is typically appointed by the court to observe the entire bankruptcy process, and he or she usually plays an important role in the meeting of creditors.
The trustee will usually oversee the first meeting of creditors and is there to help guide the process along. While creditors may be able to ask questions of the debtor, it is important to remember that it is not an interrogation. The trustee will also help explain some of the process to the applicant and will make sure to remind them of the consequences of filing for bankruptcy and how it may affect them in the future, to make sure they are aware of what they are about to undergo.
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