The Automatic Stay, as provided by under 11 USC § 362, is the first event that occurs upon filing your bankruptcy petition. The automatic stay is a federal law that prohibits any of your creditors from pursuing any remedies against you including, but not limited to, the following: 1) filing a lawsuit against you; 2) continuing an existing lawsuit against you; 3) contacting you in writing or by telephone requesting money for a debt; 4) attempting to obtain control of personal or real property either through foreclosure or repossession; and, 5) attempting to obtain control of your money through garnishing your paycheck or bank account. A creditor who attempts to pursue some form of collections actions against you after you file your bankruptcy is in violation of the law and may be brought before the Court and sanctioned for his actions.
However, a creditor may file a motion with the Court seeking permission to continue to pursue repossession or foreclosure actions against you by lifting the automatic stay. A creditor typically files a motion to lift the automatic stay to preserve its interest and value in secured property that is currently in your control, such as a home or automobile that you are delinquent in payments. The Court will generally conclude that if you are delinquent on your payments for the property, then you do not deserve to keep the property. If the Court agrees with the creditor, the Court will grant the creditors request, and at this point, the creditor is allowed to pursue repossession or foreclosure actions. This rule does not apply to property (such as a television or couch) that you purchased by using an unsecured credit card or personal loan. However, if the items were purchased immediately prior to filing, the creditor may ask for its money back but you will probably be allowed to keep the items.
Roughly 30 days after you file your bankruptcy petition, you will be required to attend a 341 Meeting, commonly known as the Meeting of the Creditors. Attendance at this meeting is mandatory. The meeting is held at the local Bankruptcy Court and you will go in front of the Trustee assigned to your case. The meeting typically lasts 5 to 10 minutes. The meeting is fairly informal and the Trustee will ask you questions regarding your bankruptcy. The meeting is called the meeting of the creditors because they too have the right to appear and ask you questions. However, creditors normally do not appear. Your attorney will also be in attendance to make sure that nothing objectionable is asked. The Trustee is an individual that was randomly assigned to your case and who administers your bankruptcy estate. The Trustee indirectly represents your creditors and his or her job is to find any property that is not protected by federal or state exemptions, and to take that property from you so that it may be distributed to your creditors.
The meeting is conducted under penalty of perjury, just as if you were in a courtroom in front of a judge. The Trustee will proceed to ask you a series of general questions (confirmation of name, address and phone number), but may also ask you specific questions about your assets that you have listed on your bankruptcy petition. The Trustee has the authority to ask you any questions relating to your bankruptcy. When responding to the Trustee's questions, speak firmly, confidently, honestly and briefly. If the question asks for a "yes" or "no" response, simply respond with a "yes" or "no". Do not offer any more information than what was asked of you.
After the conclusion of the 341 Hearing and as long as there are no problems with your petition, you will typically receive a Notice of Discharge roughly within sixty days. The Notice of Discharge is not issued from your attorney's office. The notice is an order issued from the United States Bankruptcy Court indicating that your debts have been discharged. Once the debts have been discharged your creditors cannot pursue any form of collections action against you for that debt. You are now debt free and have been given a fresh start by the Court. The bankruptcy will be listed on your credit report for an additional 8 years but you have ample time to build your credit score back up to the level it was prior to filing.
