Archive for June, 2014

National Data Center (Chapter 13 Case Information)

The National Data Center is a non-profit outfit that assists  Debtors, Debtors attorneys, Creditors and Creditors attorneys by providing up to date information regarding the particular chapter 13 case in which the Debtor, Creditor, or attorney may involved.

This is a great service for both Debtors and their attorneys alike.  The process is rather simple and after 4 easy steps, a debtor has a plethora of information available to him at his fingertips.

Step 1:  Enter Your Case Information.  When signing up with the NDC.org, the Debtor will need his case information on hand.  The 341 Notice of Meeting of Creditors is really all that is needed as it contains the Debtor’s name, case number, trustee, and Trustee State.

Step 2: Security Questions.  All the Debtor needs to do here is answer a couple questions like, what is his mailing address? From a list provided, select a creditor of the debtor.  Rather simple if you ask me.

Step 3: Create an account.  This requires the creation of a username and password and the entry of an email address.

Step 4: Terms and Conditions.  In order to use this service the Debtor must accept NDC’s terms and conditions.

And by completing these simple steps, the debtor will have at his fingertips information like:

– payments received by the Trustee

– disbursements made by the Trustee

– amounts paid to particular a creditor

– funds the Trustee has on hand

– claims filed by creditors

….and much more.  Check it out for yourself.

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The 341 Meeting of Creditors

It happens in EVERY case.  11 USC 341(a) provides that the US Trustee shall convene and preside at a meeting of creditors.  Typically in chapters 7 and 13, in Idaho at least, the US Trustee schedules the meeting of creditors and appoints a standing trustee to preside over the meeting; in a chapter 11, however, the US Trustee will convene and preside over the meeting.

In the Chapter 7 context, I see the Meeting having two primary purposes.  First, it is where the Debtor stands up and physically appears to support his bankruptcy petition and verify, or explain, its contents.  Second, it provides an opportunity for the Trustee to inquire into the breadth, or scope, of the bankruptcy estate.

With regards to the first purpose, this involves the Trustee verifying the Debtor’s social security number and a picture ID.  Subsection 341(d) also requires the Trustee to apprise the Debtor of:

(1) the potential consequences of seeking a discharge in bankruptcy, including the effects on credit history;

(2) the debtor’s ability to file a petition under a different chapter of this title;

(3) the effect of receiving a discharge of debts under this title; and

(4) the effect of reaffirming a debt, including the debtor’s knowledge of the provisions of section 524 (d) of this title.

This is basic, rudimentary stuff merely required as a formality for the US Trustee to verify the person at the Meeting of Creditors is the actual person who filed bankruptcy and the consequences of seeking a bankruptcy discharge.

The second prong of the Meeting has an entirely different goal:  $$$$$$!  The Trustee is looking for money…..well, non-exempt equity and avoidable transfers that she can convert into cash.

While the focus of the Trustee’s inquiry varies, it’s almost always geared assisting her in determining whether there is any non-exempt equity to liquidate for the benefit of your unsecured creditors, or any pre-petition transactions she can avoid (i.e., reverse).

The Trustee already has the information provided in the bankruptcy schedules and so her inquiry may be founded on that information.  The Trustee also has access to public records so she may inquire with the Debtor regarding any information she finds in her public record search that may be consistent or inconsistent with the information in the schedules.  Additionally, someone may also have tipped off the Trustee with insider information of the Debtor that the Trustee finds interesting (i.e., an ex-spouse or a disgruntled ex-business partner).

It is not uncommon for the Trustee to request documentation for her review prior to the Meeting of Creditors.  This may include, among other things, bank statements, promissory notes, deeds of trusts, security agreements, vehicle titles,  tax returns, divorce decrees, or pictures of assets.  Should the debtor fail to timely provide the requested information, the Trustee may continue the meeting.

In the Chapter 7 realm, this is usually the only meeting that the Debtor will attend during his case.

In the Chapter 13 context, there is a third prong to the 341 Meeting of Creditors.  Because a chapter 13 requires the debtor to pay into the plan all his disposable monthly income, the Trustee is behooved by inquiring into the debtor’s income and expenses going forward.

 

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