Most of your case is done by documents that are carefully prepared to be
accurate and then submitted to the
bankruptcy court electronically. It is done on the honor system. You’ve sworn
under penalty of perjury that everything is true and correct in your documentation.
Nevertheless, you still have to show up to a meeting to prove who you are and to let the Chapter 7 Trustee and any creditors that may have questions about your assets or the documents filed ask questions. It is the one “real world” thing you must do to get your discharge order. The rest is done in our office or over the internet.
It is extremely rare that a creditor shows up to the meeting. That only occurs if there is a personal beef or you have a clueless creditor who does not realize how limited the scope of the meeting is. If you have just credit cards no one will show up representing a specific credit card company.
The Chapter 7 Trustee is a private individual, either an attorney or an accountant, who is on a panel that is kept by the Office of the U.S. Trustee. His or her job is simple: Find any assets you may have that are not exempt for selling them and paying a dividend to creditors after all administrative expenses (they get paid a percentage of the liquidated amount).
There are rarely any non-exempt assets to sell. Any good bankruptcy attorney can help you protect your assets, so it is that rare case when the assets far exceed what can be protected or there was simply no planning for the case, as in cases where there the debtors represent themselves or have counsel without expertise in bankruptcy. Nevertheless, the Chapter 7 Trustee is your potential adversary in this process as they represent the creditors’ interests, not the debtor’s interest.
The Chapter 7 Trustees also make referrals to the Office of the U.S. Trustee if they see any indications of “abuse” or misuse of the bankruptcy laws. If they do find assets they have a lot of work to do as fiduciaries to the creditors. They get paid a sliding scale percentage of the assets they liquidate. In no-asset cases they get $75 of your $335 filing fee.
Chapter 13 Trustees and the 341A hearings they conduct are a different deal altogether. In Chapter 13s there are always assets from your future earnings. The Trustee is concerned with trying to maximize the payment into the Chapter 13 estate for the benefit of creditors.
There are only two Chapter 13 Trustees in Los Angeles and one in the Valley, one in all of Orange County, and one for San Bernardino and Riverside counties. In contrast, there are dozens of Chapter 7 Trustees across the Central District of California.
Woody Allen said that 99% of success in life is just showing up. Where 341As are concerned, it is usually 99.9% of success. Of course, we’ve worked hard to plan the case and accurately prepare the paperwork up to that point, so that is why just showing up usually means success. In some cases the Trustee may want to see documents extrinsic to the ones we’re required to file, such as bank statements, and we comply with that request. Yet we are rarely required to attend more than one 341A hearing.