CBS Consumer Bankruptcy & Debtor Education Flashcards

What is the primary purpose of the Section 341 meeting of creditors in a consumer bankruptcy case?

Answer: The trustee examines the debtor under oath to verify the accuracy of the bankruptcy schedules and financial disclosures

The Section 341 meeting allows the bankruptcy trustee to examine the debtor under oath about their finances and gives creditors the opportunity to ask questions, though the bankruptcy judge does not attend.

What documents must a consumer debtor bring to the Section 341 meeting of creditors?

Answer: A valid government-issued photo ID and documentary proof of Social Security number

The trustee must verify the debtor's identity at the Section 341 meeting using a government-issued photo ID and a document establishing the Social Security number, such as a Social Security card.

What is a 'reaffirmation agreement' in a consumer Chapter 7 bankruptcy case?

Answer: A voluntary agreement in which the debtor elects to remain personally liable on a pre-petition debt that would otherwise be discharged

Under 11 U.S.C. § 524(c), a reaffirmation agreement voluntarily excludes a specific debt from the Chapter 7 discharge, keeping the debtor personally liable — typically used to retain secured collateral like a vehicle or home.

Why is court review required for reaffirmation agreements where the debtor has no attorney?

Answer: To ensure the agreement does not impose an undue hardship on the debtor given their post-bankruptcy financial situation

Under 11 U.S.C. § 524(c) and (d), when a debtor is not represented by an attorney, the court must hold a hearing to ensure the reaffirmation agreement does not create an undue hardship and is in the debtor's best interest.

What is the 'redemption' option for tangible personal property in a Chapter 7 bankruptcy?

Answer: Paying the secured creditor the collateral's current replacement value in a single lump-sum payment to retain the property free of the lien

Under 11 U.S.C. § 722, a Chapter 7 debtor may redeem tangible personal property intended for personal use by paying the secured creditor the property's replacement value in one lump-sum payment.

What is a bankruptcy petition preparer (BPP) and what are the limitations on their services?

Answer: A non-attorney who types or prepares bankruptcy documents at the debtor's direction but is strictly prohibited from providing any legal advice

Under 11 U.S.C. § 110, a bankruptcy petition preparer may only perform clerical document preparation — they are expressly prohibited from giving legal advice, selecting bankruptcy chapters, or representing debtors.