Bankruptcy is a valuable tool provided by the government to grant individuals like you the chance for a fresh start. Chapter 7 bankruptcy is one of the options available to consumers and involves the sale of your nonexempt property to pay off debts. The other alternative, Chapter 13 bankruptcy, involves the development of a repayment plan instead.
Both of these require you to attend a 341 meeting, or creditors’ meeting. This is a meeting with your bankruptcy trustee, your legal representative if you choose to have one and your creditors (in some cases). While this may seem like a scary prospect, it is usually simple and often short, sometimes ending in under five minutes.
The 341 meeting is just the process of making sure all of the necessary information is right, trying to spot out possible estate administration problems and identifying nonexempt property. The goal is for the trustee to review the details and check their accuracy. It is not a court hearing, and, in spite of its name, your creditors may not even be there. The meeting is not for them to pressure you. In most cases, they opt out since it is basically an information session.
Your bankruptcy trustee puts you under oath to be honest and verifies your identity by asking to see your photo ID and a document showing your social security number. Said trustee then asks you required questions and may ask some discretionary questions. These may be about nonexempt assets (for Chapter 7), repayment plan setup (for Chapter 13), income, child support, spousal support or other factors.
The idea of a 341 meeting is intimidating to many. However, as long as you answer all questions truthfully, it usually is not as bad as you may think.
Bankruptcy allows you to wipe your debt clean to start over. It can help you rebuild your credit and learn to manage your money wisely.
There are also benefits to be had during the bankruptcy process.
Once you file for bankruptcy, the courts send an order to all your creditors preventing them from starting or continuing to take action to collect debts. It suspends the proceedings until the completion of the bankruptcy process.
The automatic stay, however, does not have the power to stop:
Filing for bankruptcy a second time in the same year may give you the option of requesting an extension of the first automatic stay.
Bankruptcy gives you the ability to discharge debts to give you a fresh start. The discharge releases you from liability for the debt and keeps the creditors from going after you. Most Chapter 7 filers get the discharge after the completion of the bankruptcy process.
If you file a Chapter 13 bankruptcy, a discharge is not as easy to get. The courts may allow you to discharge non-priority unsecured debts. Some of these include credit card balances, personal loans and medical bills.
Bankruptcy law allows you to keep all or part of your property away from creditors. These exemptions may include your home, furniture and items you use for business.
Neither Mississippi nor Tennessee allows you to choose to take federal exemptions.
Bankruptcy is a means for you to begin again financially. Take the time to look over how the process can work for you.