Here we will discuss a Chapter 7 trustee’s questions and concerns that will come up during the Meeting of Creditors’ Hearing [341(a) hearing]
Please note that it is unusual for a trustee to sell a debtor’s asset.
Although there are number of issues that the trustee is concerned about, in general the most important issues relate to the following:
1. The value of the debtors’ property.
The trustee is entitled to a percentage of the funds that are distributed to creditors, including the liquidation of assets. Therefore, the trustee is interested in the value of all the debtor’s property. Assets include any interest in any personal property or real estate. An asset includes the debtor’s right to sue for money, such as a breach of contract action or a personal injury action. For example, if the debtor has a right to sue someone for an injury that was caused by a third party, the trustee may have a right to such money.
2. Ensure that the debtors’ monthly household income is less than their reasonable and necessary expenses.
The main criteria for a chapter 7 is that the debtor’s monthly household income is less than the debtor’s household’s monthly necessary and reasonable expenses. Typically, the expenses only include necessary items such as: food, clothing, utilities, mortgage payments, transportation, etc. The monthly expenses do not include payments on credit card debt.
3. Ensure that the filing was not fraudulent
The trustee must ensure that the debtor unexpectedly found themselves in a situation that required the filing of bankruptcy protection and that the bankruptcy filing is not fraudulent.
In addition to the above, the trustee is interested in other issues, such as his right to pursue the debtors’ creditors for money. However, most of the questions relate to the above listed issues. Some of the questions that a chapter 7 trustee will ask are as follows:
– Is your petition true and correct?
– Did you review the petition prior to signing?
– Does the petition reflect your signature?
– Does your petition require any modifications or additions?
– Do you own any stocks, bonds, or investments of any kind?
– Can you sue anyone for any reason, including a personal injury action?
– Do you own any real estate?
– If so, when did you buy the real estate and how much did you pay to buy the real estate?
– Did you own or sell any other real estate within the last five years?
– Do you have a safe deposit box?
– Are you entitled to receive any money from the estate of a person who passed away?
– Did you transfer any money or property to anyone within 2 years prior to the filing?
– Did you sell any property within the two years prior to the filing?
– Did you pay any creditor, including a family member in the last year?
– Do you owe or receive alimony or support?
– Have you ever filed for bankruptcy before?
– Do you presently or have you in the past five years owned any interest in a company or operate your own business?
– What happened in your life that required you to file for bankruptcy protection?
You may contact experienced bankruptcy attorney in NJ, Robert Manchel, at 1 (866) 503-5655, to discuss chapter 7 issues and protection from bankruptcy.