There are a few parts to the process but the client would never deal with or see a lot of the players. 99 percent of people never see the judge in a chapter 7 proceeding, because these cases do not go before the judge unless there is some sort of issue that needs to be resolved with the trustee. In the average chapter 7 case, a person would meet with their attorney and then basically go over all their options.
The next step would be bringing all the information needed: name, address and account number for all creditors and things like that. We put it in the format that the court requires, so the person just reads it, signs it and then we file it. A month after we file it, the person will meet with the trustee. The trustee will verify that this was the person who signed the paperwork and that the paperwork is true and correct. They set about eight people for the same hour, so it is a very quick meeting with the trustee. The person will show their photo ID and social security card, so the meeting is over five minutes later. This is the only interaction the client has with anybody outside of the attorney’s office.
It is a little bit different for a chapter 13. The meeting with the trustee goes on a little bit longer because they will be trying to check on the feasibility of the plan that will last three to five years. Once that meeting is over, the client typically has no other interaction with anybody outside the attorney’s office.
Does The Client Have To Go And Be Deposed?
No. All the work is done on the front end in the attorney’s office, so everything is smooth after the case is filed.
Does The Meeting Of The Creditors Exist In Texas And Do People Have To Attend This?
I always tell the client that this is a meeting with the trustee because over 80 percent of the time, no creditor shows up. The technical name for that meeting is the, “meeting of creditors”; although we call it the meeting with the trustee because that is the only person they will probably see there. It is open to the public, and it is recorded but typically nobody shows up.
Does The Trustee Only Get Involved In Really Exceptional Circumstances?
The trustee is involved in every case, mainly to make sure that the person is the one who signed the paperwork, that they read the paperwork and understood it and that they met with the attorney and the attorney answered all their questions. They just need to verify who signed the paperwork and that the paperwork is true and correct. In a chapter 13 proceeding, the trustee does a same thing but in addition to all that, they will want to ask some clarification questions just to make sure that the three to five year plan is feasible.
For The Most Part, There Is No Other Interaction With The Trustee, Right?
There is no further interaction with the trustee. We may get some other information together for the trustee and provide it if they have some questions for clarification, but that is typically the extent of their interaction with the trustee in a chapter 7. There is a little bit more work to do for a chapter 13, because it is a three to five year plan. They will ask some clarification questions to make sure things are feasible and then each year, a month to three months from the anniversary date of when the plan got confirmed, we will meet with the trustee and then it is all approved by the court. We have to update the court with the person’s income and expenses every year on the anniversary of the confirmation hearing. The trustee looks at it to see if the plan payment can be increased at all and we look at it to see if it can be decreased at all.
The chapter 13 trustee would want to see the tax returns each year and see if there are any tax refunds. We have to negotiate with the chapter 13 trustee to see how much of that tax refund the client could get to keep because the payment in the chapter 13 is based on their income and expenses. If the person has more income, the question then becomes whether or not they can pay more into the plan. We are always looking at the income versus the expenses to see if that plan payment needs to be changed at all.
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