HOW CHAPTER 12
WORKS (Page
126)
Chapter 12 also contains a special automatic
stay provision that protects co-debtors. Unless the bankruptcy
court authorizes otherwise, a creditor may not seek to collect a
“consumer debt” from any individual who is liable with the
debtor. 11 U.S.C. § 1201(a). Consumer debts are those incurred by
an individual primarily for a personal, family, or household
purpose. 11 U.S.C. § 101(8).
Between 20 to 35 days after the petition is
filed, the chapter 12 trustee will hold a “meeting of creditors.”
If the U.S. trustee or bankruptcy administrator schedules the
meeting at a place that does not have regular U.S. trustee or
bankruptcy administrator staffing, the meeting may be held no more
than 60 days after the debtor files. During the meeting the
trustee puts the debtor under oath and both the trustee and
creditors may ask questions. The debtor must attend the meeting
and answer questions regarding the debtor’s financial affairs
and the proposed terms of the debtor’s repayment plan. 11 U.S.C.
§ 343; Fed. R. Bankr. P. 4002. If a husband and wife have filed a
joint petition, they both must attend the creditors’ meeting. In
order to preserve their independent judgment, bankruptcy judges
are prohibited from attending. 11 U.S.C. § 341(c). The parties
typically resolve problems with the plan either during or shortly
after the creditors’ meeting. Generally, the debtor can avoid
problems by making sure that the petition and plan are complete
and accurate, and by consulting with the trustee prior to the
meeting.
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