What Happens at the Hearing: Phoenix Bankruptcy
The second biggest hurdle and source of anxiety for many of my clients is the hearing. (The first of course is making the decision to file for bankruptcy). Some clients have told me they imagine the hearing will be a judge sitting high in his black robe – the courtroom silent as people stare while you walk towards the witness stand, and then a bombardment of questions and creditors protesting. I can assure you that no matter what idea a person had before the hearing, almost every person says to me as we are leaving the hearing: “THAT was it? I was worried for nothing!”
I know this is your first bankruptcy and you don’t know what to expect. Fear comes from the unknown, so this blog is to help you get a better picture of what the hearing entails. Every person filing for bankruptcy must attend this hearing. It is required by the Bankruptcy Code Title 11 USC §341 – which is why we often refer to it as the “341 Hearing”. The hearing serves the purpose of putting you on the record, under oath to affirm that you have been honest in all of your written paperwork filed with the court. (This is why I ask so many questions and get so much paperwork before we even file your case).
The hearing is not held in a typical courtroom. The room is more like a big conference room. There are two tables (or three) set up in an “L” or “U” shape. The trustee (there is no judge at this hearing) sits at one table, we sit at another, and the last table (if there is one) is usually empty – but it is where creditors can sit if they appear for the hearing. There are individual chairs in two rows in front of the tables where people wait for their cases to be called.
The trustee handles about 6 to 8 cases every half hour. At your scheduled hearing time, we will be called into the hearing room, along with all of the other people whose cases are to be held in that half hour. The trustee introduces himself and provides information regarding his role as the trustee. You will be called up to the table, and I will go with you.
At that time, the trustee will have you swear or affirm to tell the truth. The trustee will ask questions similar to these. Most questions can be answered “Yes” or “No”.
1. Please state your name for the record.
2. What is your current address/phone number?
3. Have you read the Bankruptcy Information Sheet I sent you? Did you understand it?
4. Have you lived in Arizona for 2 years before the bankruptcy was filed?
5. Have you previously filed for bankruptcy (if yes, when? Where? What Chapter?)
6. Did you sign the petition, schedules, statements and related documents? Did you read the petition, schedules and related documents before you signed them?
7. Are you personally aware of the information provided in the petition? To the best of your knowledge is that information true and correct? Are there any errors you want to bring to my attention at this time?
8. Are all of your assets listed in the petition?
9. Are all of your debts listed in the petition?
10. Do you pay any domestic support obligations (child support/alimony)? If yes, what is the name and address of the person who is to receive those payments?
11. In the 4 years before you filed this bankruptcy, did you reject (refuse to accept) any inheritance or interest in a trust?
12. Do you understand that if someone dies within 180 days after you filed bankruptcy and a result you might receive an inheritance, life insurance or interest in a trust, then you must immediately notify the trustee?
13. Are you a plaintiff in a lawsuit? (Do you have any claims pending that you could make for personal injury or property damage or any other reason?)
14. If you are married and filing jointly, the trustee will ask your spouse this: Did you hear the questions I asked your spouse? If I asked you those same questions, would your answers be the same?
The trustee may have additional questions for you to clarify any information that was listed in your petition. He concludes by asking if any creditors are present and wish to be heard in your case. It is very rare that a creditor will show up to your hearing.
It is still the unknown, but hopefully this helps develop a slightly different picture. Important things to remember: 1) I will be there with you; 2) No decisions are made, this is just a formality to see that you were truthful when you submitted your petition for bankruptcy; 3) It doesn’t take long; 4) you aren’t alone. You’ll find the room packed with many other people who have made the same decision as you, to free themselves from overwhelming debt. Remember, the hearing means this part of your life is almost over. You too, will probably say, “THAT was it? I was worried for nothing!”
