Post 341 hearing decompression done – now I can talk about it…

So the 341 hearing was done last Monday.  After 60 days, I hope to receive the discharge notice.  And during the next 45 days, my soon-to-be ex-spouse & I need to attend a credit counseling course to teach us the ways not to get in the same shape again.  The paralegal for our attorney will help us through this next stage.  If we don’t complete within 45 days, we have to start all over.  Based on the experience of the hearing, I don’t want to go back.

The hearing itself lasted maybe 5 minutes.  We arrived at the federal courthouse an hour early per hour attorney’s recommendation.  The purpose was to A) get there, B) find the hearing room, & C) watch other folks go through the crap & see what the trustee would ask.  Our hearing was scheduled for 1:30 p.m., but the first group of afternoon hearings started at 1:00 p.m.  Each 30 minute block had 5-6 folks scheduled.

During each hearing for each debtor, the trustee asked the following type of questions:

• Are you the person who filed?  We had to bring proof that we were who we said were – picture ID (drivers license) & proof of Social Security Number (Social Security card or W-2)
• Did you file the most recent federal tax return?
• If you got a refund, what was the amount & has it been received already?
• Did you file the bankruptcy papers & are you familiar with the details?
• Are you entitled to any settlements due to auto accident or personal injury?
• Are you entitled to any child support or alimony payments?
• Do you have any inheritances or insurance proceeds coming to you?
• Do you own any other properties other than your primary residence?
• Have you made any payments over $600 to anyone other than your mortgage?
• Do you own any stocks not in an IRA or 401(k)?

The purpose of the questions were to a certain if you had anything of interest that the trustee could use.  Why is that you ask?  Turns out that the trustee is actually an attorney that is contracted by the government to see if there assets or sources of money to take so that creditors can be paid.  If he can get any money of you, then he gets a commission of 5-7% of whatever he can recover.  If you have nothing, then move along – nothing to see.

While we sat there & watched the 1:00 session, we saw how he operated.  He went through the filings & asked questions wherever he saw something that peaked his interest.  One couple owned a cement pouring business,  He questioned them about the number of jobs the guy had completed over the past year (4), how much he netted for each (not much), and the equipment he owned (1 mixer for $27k, with an outstanding loan of $25k).  Not sure what would have happened if he owned the the equipment outright – would the trustee have taken it?  Not sure…

Once he went through those types of questions, he would then ask the gallery if any creditors were present that would like to make a claim or ask questions of the debtor.  While we were there, only 1 creditor actually showed up.  Once that piece of the hearing was complete, then the hearing was over.

At 1:30, our session began.  We were fourth on his docket.  Ours went pretty much the same as everyone else’s that we saw.  There was one moment when things seemed to be going wrong.  In reviewing our budget, he saw that my income was above the the basic means test level.  In order to qualify under the basic means test, you have to earn less than the median wage for the U.S.  I’m not sure what the exact amount was, but we were above it.  Because of this, we had to go through an alternative (and more difficult) test.  As soon as that was noticed, the trustee reviewed our B-12 schedule.  This is where the panic set in.

He basically questioned why we had to file bankruptcy.  Our lawyer stepped in at that point and helped guide us through that.  At the very end, we were approved… barely.

By far, this was one of the most grueling, stressful, humiliating experiences I’ve had to go through so far in my life.  And it took 5 minutes.