Trustee Blog

Creditor Issues

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Today we continue with our discussion of the creditor’s role in the meeting of creditors. When the bankruptcy petition is filed with the Court, the Court Clerk then sends a notice to all the creditors listed in the petition.

The Notice of Commencement states to all creditors:

“A chapter 7 bankruptcy case concerning the debtor(s) listed below was filed on ….You may be a creditor of the debtor. This notice lists important deadlines. You may want to consult an attorney to protect your rights. All documents filed in the case may be inspected at the bankruptcy clerk’s office at U. S. Bankruptcy Court, 3420 Twelfth Street, Riverside, CA 92501−3819.
NOTE: The staff of the bankruptcy clerk’s office cannot give legal advice.”

The Notice of Commencement gives creditors other rights and responsibilities. The biggest right is the right to attend the meeting of creditors. Rarely does a creditor attend the meeting, but if the creditor does attend he or she can ask questions of the debtor.

Riverside Bankruptcy Trustee Karl Anderson asked a creditor today to limit her questions to “any assets not listed in the petition, any under valued assets or any assets that were given away to other people before the filing of the bankruptcy.” Trustee Anderson went on to say that “if the creditor had information on these assets that this would lead the trustee to assets that could be sold to pay creditors”.

In addition the Chapter 7 Trustees job is to find out if the debtor had done any fraudulent activity. So a creditor can ask about fraud as this will help the trustee in his or her investigation of the debtor.

Practice Pointer:

Advise your client that the meeting of creditors is a public hearing and any creditor can come and ask questions.  The Trustee will want to find assets and to find out about fraud.


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