The Parties in a Bankruptcy
- Debtor: The person or entity who owes money and the party filing for bankruptcy relief.
- Creditor: The person or entity who is owed money.
- Trustee: The third party appointed through the United States Trustee Program of the Department of Justice to administer the bankruptcy and represent the interests of the bankruptcy estate. There is a panel of Chapter 7 Trustees where cases get assigned on a rotational schedule, but there are standing Chapter 13 Trustees.
- Debtor’s attorney: The professional who will assist the person or entity filing for bankruptcy relief, evaluate and explain the available options, and offer legal advice.
- Clerk: The office where a bankruptcy petition and other documents are filed in the United States Bankruptcy Court.
- Judge: A judicial officer of the United States Bankruptcy Court who has decision making.
Gather all recent bills, any legal documents or foreclosure notices, paystubs, and copies of tax returns.
Pre-Filing Credit Counseling
Federally approved credit counseling must be obtained within six months before a bankruptcy is filed.
The Automatic Stay
When a bankruptcy petition is filed, with some exceptions, an automatic stay goes into place which stops creditors from taking or continuing collection action. The automatic stay stops a creditor from making phone calls or sending letters regarding debt collection.
Debtor Education Course
Any time after the bankruptcy is filed, a post-filing federally approved debtor education course must be completed in order to be eligible for a discharge.
The 341 Meeting
Every debtor in bankruptcy is required to attend a meeting of creditors, commonly referred to as a “341 meeting.” The trustee in bankruptcy conducts this meeting to evaluate debtor’s filing and financial condition. Creditors receive notice of this meeting and may attend the meeting to ask questions.
A release of personal liability for certain types of dischargeable debts. Creditors are prohibited from collecting on discharged debts.