If you didn't know any better, you might be somewhat alarmed when you hear about an important legal step in your Chapter 7 bankruptcy: the creditor's meeting. This meeting may be the only time you can actually expect to make a public appearance for your federal filing, and the very idea, at least based on the name, of facing the people you owe money to can be extremely off-putting.
Don't let the name fool you, however, the creditor's meeting is really nothing to be worried about, and the name is a bit of a misnomer. Read on to learn more about this meeting so that you will be more than ready to participate and move on toward your final bankruptcy petition.
Be prepared: If you are being represented by a bankruptcy attorney for your bankruptcy (and you should be), you will be quite prepared to face the day. While there is a possibility that a creditor may show up at your meeting to question you about a debt, you will know about it ahead of time and be ready to answer them. In most instances, however, creditors only bother to attend in certain circumstances, such as the two below.
You are reaffirming a debt: As you may know, your debts can be divided into secured debts and unsecured debts. Since secured debts are connected to property, such as a home or a vehicle, you may stand to lose that property in certain circumstances. A reaffirmation allows you to keep that property by making a promise to pay that debt, regardless of your bankruptcy filing. This happens most often to loans on vehicles where the debt is nearly paid off and the vehicle is not worth seizing for resale. Since it allows you keep your car or other property as long as you continue paying as agreed, it's a good thing.
You have used your credit cards recently or charged too much: To ensure that consumers don't take an undue advantage of not having to pay off that unsecured credit card debt, there are some rules about how you can use your plastic right before you file for bankruptcy. If you have violated one of these rules, you may face some questioning at your creditor's meeting. While it's okay to use your credit cards before you file, you must not use them for frivolous reasons. Charging a car repair is fine, charging a trip to Disney World is not fine.
For more information about Chapter 7 bankruptcy, contact a lawyer at firms like Haven Law Group, P.C.