Mandatory Credit Counseling and Debtor Education |
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Anyone who wishes to file for bankruptcy under Chapter 7 or Chapter 13 must have completed a pre-filing credit counseling program and receive a certificate of completion from an approved non-profit agency within 180 days prior to filing a Petition. In addition, bankruptcy filers must complete a personal financial management course with an approved non-profit agency and submit proof of completion or they will not receive a discharge. In order to comply with these credit counseling and debtor education requirements, filers must work with non-profit agencies that have been approved by the U.S. Trustee Program (a branch of the U.S. Department of Justice that is responsible for overseeing bankruptcy cases) - links to information on credit counseling and debtor education and lists of agencies that have been approved by the U.S. Trustee Program may be found at http://www.usdoj.gov/ust/eo/bapcpa/ccde/index.htm. |
What Happens Next? |
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Let's assume that the debtor has completed his or her petition including all required schedules and the statement of financial affairs and has filed the petition with the bankruptcy court along with the required non-refundable filing fee. What happens next? The answer to that question will vary widely from case to case. However, there are a few general observations that can be made.
Once the bankruptcy court receives a petition, the case is assigned to a bankruptcy judge and the United States Trustee assigns the case to a panel trustee. The duties of the trustee are wide ranging but he or she can be best thought of as case administrator. In short, the trustee reviews the debtor's petition, examines the debtor at the first meeting of creditors, determines what assets the debtor owns, what debts the debtor owes and whether there are any assets other than exempt assets to be administered for the benefit of the debtor's creditors. The First Meeting of Creditors, also known as the "341 Meeting" is normally held about one month after a petition is filed. At the first meeting of creditors, the case Trustee examines the debtor by asking him or her about the information listed in the debtor's petition. Also, any creditor of the debtor may attend and be heard. Based on the examination, the trustee may ask the debtor to supply further information in order to give the trustee a fuller or more accurate picture of the debtor's financial affairs. If the trustee is satisfied that there are no non-exempt assets to be liquidated and that the Petition and Schedules are complete and correct, they will ordinarily "close" the meeting. If they are not satisfied they will adjourn the meeting and direct the debtor to produce documents needed to verify the facts. No case will be officially closed until the time passes for the creditors to file an objection to discharge. After that time passes ordinarily the Court will issue the Discharge of Debtor notice and the docket will reflect that the case is closed. |