What Happens in Bankruptcy Court?

Attending court, for many individuals, is a highly stressful event. The primary reason for the anxiety associated with appearing in bankruptcy court, or any other court hearing, derives from the uncertainty of the outcome. Hopefully, additional information about what usually happens in bankruptcy court can curb some of the angst associated with using the US Bankruptcy Code to obtain relief from extreme debt.

How Bankruptcy Court is Different

In criminal court, there’s a prosecutor and a defendant with the defendant being on trial. This is similar to a civil trial, where there is a plaintiff and a defendant. In both circumstances, you could be on trial, which could threaten your money or freedom and is understandably different. However, in bankruptcy court, you are not on trial. Not being able to pay your debts is not a crime. As such, bankruptcy courts function in a capacity to assess the facts of each debtor’s bankruptcy case.

Your Single Bankruptcy Court Hearing

When filing for bankruptcy, there is usually only one solitary court hearing called the 341 Meeting of Creditors. This meeting is drastically different from all other court appearances, as there is typically no bankruptcy judge involved, but instead a bankruptcy trustee who asks you questions to clear up any ambiguity surrounding the debts you reported in your initial bankruptcy filing. The Meeting of Creditors will typically consist only of yourself, the bankruptcy trustee, and your bankruptcy attorney and will last a total of 15-20 minutes. This meeting constitutes a court hearing so you will be sworn in before answering the trustee’s questions. This is an effort to keep individuals from willfully committing bankruptcy fraud. Assuming that all your bankruptcy paperwork in our initial bankruptcy petition was accurate and thorough, it’s likely that you won’t need to appear in a courtroom to discharge your debt.

Hiring a Bankruptcy Attorney

You must answer the bankruptcy trustee’s questions directly, but ensure you ask your bSacramento bankruptcy lawyer what to expect in this meeting. Having legal representation is so important when reorganizing debt that the US Bankruptcy Courts highly advise hiring a bankruptcy lawyer to help you navigate your bankruptcy case. This isn’t required, but the rates for eliminating or “discharging” your debt are much higher for debtors with a bankruptcy attorney representing them. Additionally, a bankruptcy attorney can make sure that your initial petition for bankruptcy protection is filled out properly and that nothing you have stated constitutes fraud.