As a creditor, you have a right to retrieve your money through various means. However, when a client files for bankruptcy, you must abide by the laws surrounding bankruptcy and your rights to repayment. When a client files for bankruptcy, he or she must have a 341(a) meeting of creditors after filing for bankruptcy.
According to the United States Bankruptcy Court, you have an opportunity to show up during the meeting of creditors.
Why is there a meeting of creditors?
During a 341 meeting or meeting of creditors, a trustee reviews a debtor’s petition to file for bankruptcy. The debtor has to go to the meeting and often answers questions posed by the trustee. The questions revolve around the person’s financial situation and reasons for filing for bankruptcy. In addition to ensuring a valid bankruptcy case, the meeting of creditors also helps the debtor understand the process. In addition, creditors can use the meeting to their advantage too.
Do you have to show up at the meeting of creditors?
As the creditor, you do not have to go to the meeting of creditors. Most creditors do not. However, if you suspect fraud or believe the debtor hid assets, you may want to attend the meeting to speak your case. If the debtor puts up collateral, you may want to participate in the meeting to find out what he or she may do with the property. The meeting allows you an opportunity to file any objections regarding the bankruptcy.
In most cases, the debtor has the meeting of creditors between 20 and 40 days following bankruptcy.