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Simple English definitions for legal terms
Meeting of Creditors
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A quick definition of Meeting of Creditors:
A meeting of creditors is a meeting where the person who owes money (called the debtor) meets with a person who is in charge of the bankruptcy case (called the trustee). The trustee checks to make sure that the debtor's paperwork is correct and that they are not lying or cheating. The meeting usually happens about a month after the debtor files for bankruptcy. The debtor has to go to the meeting, but the creditors don't have to. If the meeting goes well, the debtor's debts will be forgiven.
A more thorough explanation:
A meeting of creditors is a meeting that takes place during a bankruptcy case. It is presided over by the United States trustees and is regulated under Section 341 of Title 11 U.S. Code. This meeting is also known as a “341 meeting”. The purpose of the meeting is to confirm the accuracy of the documents filed by the debtor and to detect possible bankruptcy fraud.
The meeting of creditors usually takes place about a month after the debtor files for bankruptcy. While creditors are not required to attend, they may attend and ask questions. The debtor, however, must attend the meeting. The trustees will try to prevent bankruptcy fraud by determining whether there are any assets that are not protected through exemptions.
For example, if a debtor files for bankruptcy and claims that they have no assets, but the trustees discover that they have a valuable piece of property that is not exempt, the trustees may sell the property to pay off the debtor’s creditors.
The meeting of creditors is usually short, lasting only about 10 minutes. After the meeting, if all questions have been asked and answered, the bankruptcy proceeding will automatically proceed to a discharge of debt in most cases.
For example, if a debtor has filed for bankruptcy and has completed the meeting of creditors, and there are no objections from creditors, the debtor’s debts will be discharged, and they will no longer be responsible for paying them back.