About a month after we file your bankruptcy papers, we go with you to your bankruptcy hearing. The U S Trustee’s office here in Alexandria, Virginia schedules fourteen hearings an hour. For many people, the bankruptcy hearing takes three minutes or less.
You want to be one of the people who is in and out in under three minutes.
There are three different ways you can get in trouble at your bankruptcy hearing. You want to avoid all three.
First, your creditors can come and ask questions, getting ready to object. (Your bankruptcy hearing, in fact, is called the “meeting of creditors.” For most people, there are no creditors at the meeting.)
When creditors do come, what are they looking for? Creditors most often object if they think you ran up your credit cards when you knew you were planning to file bankruptcy.
That’s one reason we have our clients get their credit report from Experian.com/reportaccess. That’s the best internet credit report for balance history. And studying your balance history, we watch out for changes in your account balance that might trigger a creditor objection. (And, we plan a strategy, if something looks bad.)
The second way to get into trouble is with the Office of the United States Trustee. The US Trustee is part of the Department of Justice. Their job is to look for mistakes and fraud in your bankruptcy papers.
The most common mistake is calculating your bankruptcy means test incorrectly. Your means test is a formula, put in the law by Congress in 2005, that determines whether you are making too much money to file Chapter 7 bankruptcy.
That’s why we take all the time you need to go over your family budget in detail. At the beginning of your case. Many people tell us they are living paycheck to paycheck–but their first budget shows they are drowning in cash. We spend the time it takes to figure out where you really need to spend your money–and how to put that into categories that the law allows. (This blog tells you more about that.)
What’s worse than having your bankruptcy opposed because of a math mistake? Having it opposed for fraud. The U.S. Trustee can order a random audit of your bank accounts for the last six months. If there’s something that would be hard to explain, maybe we need to wait another few months.
The U.S. Trustee also runs a computer search on some people–looking for hidden property. We run a computer search on you, too.
We want to spot possible problems before they are problems. ”What’s this house on Main Street, in Disputanta?”
“That’s my grandfather, we have the same name.” Ok, we’re ready for that if it comes up.
“What’s the property in your name in Luray?”
“Oh, I forgot to tell you my mom deeded the house over to me and my brothers.” Well, then we should probably hold off on the bankruptcy until we are sure it’s not going to cost mom her house.
I was waiting for one our hearings to come up, about a year ago, when the U.S. Trustee asked the person in front of us, if he knew anything about property at a certain address.
“No I don’t,” was the answer.
“The deed shows that it is in your name,” said the U.S. Trustee.
“Not mine,” was the anwer.
“Let me show you this photograph.”
It went down hill from there. Ouch. That guy was looking at a perjury prosecution.
We spend a lot of time with you at the beginning of your case–when we first meet. Asking questions, answering your questions, and going over our forms. We want to make sure we have complete information about you and your finances–so you don’t have any problems with the U.S. Trustee.
Usually, if things are going right, there will be no creditors at the meeting of creditors; and the U.S. Trustee won’t be there, either.
But you will always see the appointed Bankruptcy Trustee for your case. In Alexandria, there are five men and two women who are appointed Bankruptcy Trustees. The court’s computer randomly assigns your trustee. (Except that Klinette Kindred cannot be your trustee if I am your lawyer, because before she was a trustee, she was a lawyer in the Robert Weed law firm.)
The Bankruptcy Trustee conducts the meeting of creditors. He reviews your file carefully before the bankruptcy hearing, so in most cases has only a few questions.
The Bankruptcy Trustee is looking to see if you had more property than you are allowed to keep under Virginia law, so that some of it can be sold to pay part of your debts. Knowledge of Virginia exemption law, and careful planning, can usually avoid the trustee selling any of your property.
Also, like the U.S. Trustee, your Bankruptcy Trustee is also looking for mistakes or possible fraud on your bankruptcy papers.
The Bankruptcy Law Firm of Robert Weed has done more than twelve thousand bankruptcy hearings. (We’ve in the the room watching another fifty thousand.) We use our experience to make sure you are prepared for yours.
In the fall of 2011, we did a three year after-bankruptcy survey of our former clients. We asked them to look back and tell us how we did. They gave us 4.6 stars (out of a possible five) for the way we handled their bankruptcy hearings.
Our current clients also say good things. Karen, from Woodbridge, gave us five stars, and said, ”You could tell the trustee at the meeting of creditors had alot of respect for Mr Weed and his associates.”
Teresa, from Falls Church, gave us five stars and wrote, ”I also knew sitting in the lobby at the bankruptcy court in Alexandria that we made the right decision. Some attorneys were presenting their clients with issues and documents that were presented in our initial consultation with our lawyer at Mr. Weed’s office! This right before the actual hearing!!”
Bonnie, of Leesburg, gave us 4.6 stars. She said, “After watching other individuals there with other attorneys, I am so glad I made the choice I did.”
(I should add that every case is different. And your results depend on the law and facts of your case. Sometimes we know people are going to run into problems that will pop up at their hearing. If bankruptcy is what they need to do, even with possible opposition, and we just prepare the best we can, document our position, and go ahead.)
PS. Here 1Ch 7 Handbook 2014 is the link to our handbook that explains the hearing process in more detail.