General Information.  Individuals and corporations seeking relief from creditors may file Chapter 7 Bankruptcy seeking a "Bankruptcy Discharge" which is an order from the Court relieving the debtor from any obligation to pay any debt that may be discharged.   Most debtors are represented by attorneys, although some debtors attempt to represent themselves, pro se, without the aid of an attorney.  Competent attorneys know what debts may be discharged, what may be discharged by reason of hardship or other grounds, and can advise you as to your rights. Pro se debtors are held out the to same standards as those represented by attorneys, and must correctly prepare, answer, and file the necessary petition and other schedules. Pro se debtors unfortunately do not have knowledge as to what debts may be discharged, and in some cases, my be denied discharged in situations where they could have been discharged had the matter been handled correctly.  Failure to properly amend any incorrect schedule in most circumstances will result in the case being dismissed as most pro se debtors do not know or understand how to file corrected schedules.  As a Chapter 7 trustee, it is highly recommend that you obtain the services of a bankruptcy attorney to assist you to insure you receive the relief you are seeking.

    Upon filing the petition, the Court sends out a notice to all the creditors you have listed informing them of the bankruptcy.  This is why it is important to list all your creditors.  You are required to list all your creditors and all your assets.  Failure to do so could result in a denial of your bankruptcy discharge.  You should make certain that all of your debts,  all of your assets are listed correctly, and all of the information is correctly answered.  Filing false or inaccurate schedules could result in your case being dismissed, a loss of your discharge, or even criminal prosecution.

    Trustee's Letter to Debtors.  Upon appointment, the Trustee mails each debtor a letter instructing the debtor to bring to the meeting certain documents, and other information. The reverse side of this letter contains the Bankruptcy Information Sheet.  If you did not receive this letter, a sample can be found HERE.   DEBTORS MUST ACKNOWLEDGE THAT THEY HAVE READ BOTH BEFORE MEETING CAN BEGIN.  IF THE DEBTORS HAVE NOT READ BOTH SIDES OF THIS LETTER, THE MEETING WE BE ADJOURNED UNTIL THEY HAVE AN OPPORTUNITY TO DO SO.

    Income tax issue.  Tax refunds that are not attributable to Federal Earned Income Credit are property of the estate and may be administered by the trustee. Depending on the date of filing, the debtors may receive a letter requesting information concerning their tax returns.  A copy of the letter can be found HERE.  If you spent your tax refund before receiving the letter from the trustee, be sure to bring the tax returns to the meeting, and inform the trustee at that time. You do not need to call the trustee prior to the meeting.  If you have failed to file any previous years tax returns, you will be required to file them before you can obtain your bankruptcy discharge.  The Federal Earned Income Credit is exempt.  In some cases, the trustee may take the portion of the tax refund that is not attributable to the Earned Income Credit, and refund the Earned Income Credit back to the debtors.  As a general rule, tax refunds are administered by the trustee if the refund equals or exceeds $2000, or if administering the refund would result in a dividend to the unsecured creditors of at least 5%.  If there are other assets in the case to be administered, then all of the tax refund that is not attributable to the Earned Income Credit may be taken.

    Exemptions.  Under Oklahoma law, debtors are allowed to exempt, or keep, certain property, including your home and each debtor may keep a vehicle, which has no greater equity value, of $3,000.  Equity value is the amount the vehicle is worth after paying off any lien or mortgage.  You should consult with your attorney as to what exemptions may be available to you and list them on Schedule C of the bankruptcy schedules.  Improper exemptions will result in an objection being filed by the trustee and the matter set for hearing before the Court.

    341 Meeting of Creditors.  After the case is filed, the Clerk of the Court sets a 341 meeting of creditors.  This refers to 11 U.S.C. section 341, which requires that a hearing take place in which the trustee, the debtors, their attorney, and any creditors my appear to question the debtors concerning their bankruptcy.  Questions are limited to relevant issues concerning the bankruptcy.   The trustee presides over this meeting.  The trustee insures that relevant questions are asked, and further insures that debtors are not harassed by creditors, and that debtors cooperate in the trustee's investigation of the debtors' financial matters.

    Trustee's duties.  The Trustee, who serves on a panel approved by the United States Trustee's office (a division of the Department of Justice) is appointed the the case upon the filing of the petition. Upon his appointment, the trustee reviews the petition, schedules and other documents filed with the clerk.  The trustee insures that the debtor's schedules are properly filled out according to law, and when conducting the 341 meeting of creditors, places the debtors under oath  and subject to perjury charges if they give false testimony.  The trustee further inquires about any questions that he may have concerning the schedules, assets, or other issues.  The trustee is a fiduciary of the estate, and as a fiduciary, has a duty to insure that any non exempt assets be administered if they are of sufficient value to result in a meaningful distribution to the creditors.  This means, that unless the trustee determines the value of any non exempt asset is not enough to warrant administration, that he take possession, sell, and then distribute any proceeds to the creditors.  All non exempt property of the debtor becomes property of the estate, meaning that the trustee has the right to take possession and sell such property, unless the trustee abandons the property, or the property is not administered before the case is closed.  This terminates any right the trustee may have in the subject property (although, if the property has not been listed on the schedules, the property is never deemed abandoned and may be administered at any time in the future).

    If the case has no non-exempt assets worth administering, the trustee files a report with the court that advises the court of his finding, and the discharge entered by the court and the case closed after the time to object to discharge has expired (initially 60 days from the 341 meeting of creditors, but this date may be extended by the Court.)

    Asset Cases.  If the trustee discovers non exempt assets, those assets, if worth sufficient value, are taken, sold and the proceeds paid to creditors. The trustee is paid a fee from these proceeds based upon the total amount distributed.  The trustee may pay attorney fees and costs for any legal work down which benefitted the estate.  Application for payment by professionals of the estate are made to the Court, who, after notice to all parties, reviews the application and enters an order approving such payments.  Creditors are given notice to file claims, and the trustee pays such creditors in a priority required by law, and pro rata among similar claimants.

    Automatic stay. When the Petition is filed, an automatic stay, or injunction, is issued that stops all collection activity, including garnishments, executions, foreclosures, or sale, of any property of the debtor until the Court grants relief from the stay.  If you are a debtor, and any creditor continues to attempt any collection activity, you should contact your attorney immediately.  If you are a pro se debtor, you may wish to contact an attorney for help.

    Discharge.  The goal of a chapter 7 case is the entry of an order of discharge by the Court.  This order "discharges" any obligation the debtor had to pay certain debts. All creditors are prohibited from attempting to collect any debt that has been discharged. Note that some tax debts, student loans, child support obligations, and other debts may be excepted to discharge.  Debtors who have been previously discharged in a case filed within six years of the date the current case are not eligible for discharge, and debtors who failed to pay seventy percent to the unsecured creditors in a Chapter 13 case filed within the previous six years from the date the current case was filed are also not eligible to be discharged, except in certain circumstances.

   Closing of the case.  After the discharge has been entered, and if there are no assets for the trustee to administer,  the case is closed.  However, the stay remains if effect and prohibits any collection of any discharged debts.  If there are assets to be administered, the case is closed after  the trustee has distributed all funds, tax returns have been filed, and completed any other tasks to close the case.

    Attorney Misconduct..  Attorneys who represent debtors in Bankruptcy Court are required to comply with the Code of Professional Responsibility as governed by the Oklahoma Bar Association.  Failing to property represent clients may result in a grievance being filed with the General Counsel's office of the Oklahoma Bar Association by the trustee, or by the debtors, and if warranted, the attorney may be disciplined.  The discipline could range from censure, to disbarment, depending on the type of misconduct and other factors (such as numerous complaints or previous discipline).  Examples of such misconduct are charging excessive fees, failing to disclose a fee, failing to timely file the bankruptcy petition and schedules, failing to appear at the 341 meeting of creditors or providing substitute counsel to appear on their behalf, and failure to accurately set forth all assets and debts on the schedules.  If you believe your attorney has committed a violation of the code of professional responsibility, you should bring the matter to the attention of the trustee.  In addition, you should file a written grievance with the General Counsel's Office of the Oklahoma Bar Association, P.O. Box 53036, Oklahoma City, OK 73152-3036.  A written grievance is nothing more than a written letter setting forth your name, the attorney's name and address, and the facts relating to the representation which relates to the misconduct.  You should be as specific as possible.  Note, unless the fee is clearly excessive, fee disputes are not usually grounds for discipline.