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What is a Bankruptcy Hearing?

Bankruptcy

A bankruptcy hearing is simply any appearance before a bankruptcy court. In individual bankruptcy filings there are generally fewer appearances in bankruptcy court than in business filings under Chapter 11 or Chapter 12 plans. Those chapters generally involve many more complicated issues, more classes of individuals who have a say and a greater need for hearings to clear up various issues.

An Individual Could Have Only One Bankruptcy Hearing

In a Chapter 7 liquidation case, the debtor will be required to show up before the bankruptcy trustee for the Section 341 meeting, also known as the creditors meeting. This usually takes place between 30 to 45 days after the bankruptcy filing. You must show up - in fact your case can be dismissed if you don't - but Section 341 meetings often are 10 minutes or less and stress-free. This is a time for the trustee, who has been appointed by the bankruptcy judge, to go over your filing and ask any questions about your finances. You will be asked to swear to the accuracy of all of the information in your filing.

Although it's known as a creditor's meeting, it's actually unusual for a creditor to show up. Most creditors raise any issues they may have in court documents. If a creditor does show up for the bankruptcy hearing, you will be asked basic questions about the debt for that particular creditor that you have included in your bankruptcy petition. If you have an attorney, he or she will be right next to you and available to offer advice. In the majority of Chapter 7 cases, the 341 meeting is the only time the debtor must show up in court.

More Bankruptcy Hearings Possible in Other Filings

There's at least one more bankruptcy hearing that could be required in a Chapter 13, in addition to the Section 341 hearing, and that's the confirmation hearing when the payment plan is completed. However, some bankruptcy districts vary in whether debtors must attend. Some allow attorneys to represent their clients.

But there are plenty of other reasons in a Chapter 13 case, and particularly in Chapter 11 and 12 business filings, to come before the bankruptcy judge for a bankruptcy hearing. A trustee or judge will hold a hearing when evidence is required on issues related to the bankruptcy filing. If a credit makes a claim of fraudulent activity by a debtor in a Chapter 13 case, for example, that can lead to a court hearing. A decision by a bankruptcy judge on competing reorganization plans in a Chapter 11 case could be the subject of another hearing. Or a claim that you have committed fraud or not qualified in some way for a bankruptcy filing could lead to a hearing for a possible bankruptcy dismissal. The rule of thumb is that the more complicated the bankruptcy filing, the greater the potential for bankruptcy hearings.

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