The 341 Meeting

We have now been to 'court,' better known as the 341 Meeting or Meeting of the Creditors or Creditors Hearing. Really, it wasn't even in a courtroom! What it was was m-i-s-e-r-a-b-l-e, if for no other reason than we were stuck there for literally twelve hours.

The first 3 hours was a credit counseling session - how to turn the Bankruptcy into something positive and not fall back into the same trap at some point in the future. Then, from noon until 7:00 that evening, we sat and sat and sat and sat and sat and sat... just waiting for our case to be called. It was a huge room filled with other people like us, with a table at the front of the room, and each case was called one by one to sit and answer whatever questions the Trustee (the attorney handling the case for the U.S. Bankruptcy Court) might have had.

When we were finally called, there were about 5 people left in the room. o_0 The Trustee didn't have any hard questions for us, but did raise an eyebrow toward our rental property. We are not behind in any of our secured debt payments, so we are not in immediate risk of losing anything. But, according to the Trustee, since we are not falling behind on the rental property, he said he didn't know if he could in good faith let us keep the property. Yet, when you look at what we owe and what it could be sold for, there would likely be a loss, so it's not like selling it would 'fix' anything. I really don't understand his logic - it seems counterintuitive. But, at the end of the meeting, he did say that the proposed Chapter 13 payment plan seems suitable, but he would still need to look closer at a few things.

We left feeling completely defeated. Demoralized. Deflated. Demeaned. Depressed. We were kind of stunned, since the paralegal had assured us that there was really no reason for the Trustee to be concerned with the rental property... its value and the amount we still owe being the main factor. It kind of leaves things completely up in the air, especially since we had hoped to get renters in there ASAP. Now, we can't in good faith rent it to anyone until we know its fate!

For now, it's a hurry up and wait situation until we hear back from the Trustee with an approval from the U.S. Bankruptcy Court that our Chapter 13 payment plan has been approved. Of course, before all of that, the Trustee has to wait 30 days from the date our creditors were informed of their right to file a claim against us for our debts, or something along those lines.

Really, I just want all of this to be over... and I know that won't be achieved for at least another year. I never would have known Bankruptcy was such a long process! Maybe it used to be?

Oh yes, and the icing on the cake!!! I have sent 3 E-mails over the past few weeks to our paralegal and have not received any responses. In one instance, we got a packet in the mail a few days after I sent my E-mail, so I thought she had either read my E-mail and replied with the packet, or it happened to be a fortunate coincidence. Well, today we find out that our paralegal NO LONGER WORKS AT THE LAW FIRM! It was so nice of them to let us know that we now have a different paralegal! Thank goodness Mr. America called today to check on a few things, because there's no telling when we would have found out. Our new paralegal claims the E-mails should have been forwarded from the old paralegal's E-mail, but it doesn't seem if that happened. I was very pleased to see an E-mail from our new paralegal that pretty much answered some of my questions, but I do have two concerns.

First, she addressed me as Amanda. It's a beautiful name, but it is not MY name!

Second, she didn't answer the question about the payment the Trustee made to our automobile, even though the automobile is secured and should not be included in the Bankruptcy.

Amanda. Hmph.

OK, Wait... What?

Okay, so I am now thoroughly confused!

Even though we have not yet gone to court, we have still been responsible for making payments to the Bankruptcy Trustee. Since we are technically filing under Chapter 13, it requires that we be set up on a payment plan to 'pay back our debts.' According to our attorney, this form of Chapter 13 does not actually repay our debts, but it is merely the attorney's fees set up on a payment plan. In other words, $2,000+ attorney's fee is split up over a monthly payment for the next 18-36 months.

As I previously mentioned, this form of Bankruptcy also allows us to keep our personal property (home and vehicles), yet discharges our unsecured debt (credit cards and medical bills). As a result, we have stayed on top of all other payments while letting our credit cards go past due.

I logged on to check that our automobile payment went through and was a little surprised to see not only the regularly scheduled automatic payment, but a partial payment made in the form of a check. I did not send any extra money for our auto loan, so I called to ask what was going on. I was really thinking it was a misapplied payment that probably belonged to someone else.

Imagine my surprise when I was informed it came from the Bankruptcy Trustee! At first, the representative informed me that, as a result of the Chapter 13 filing, he could not speak to me in reference to anything on our account, and referred me to the Loss Department (or something like that). But, I did manage to get out of him that the payment came from the Bankruptcy Trustee.

So, the monthly payment that we thought was supposed to cover only attorney's fees is actually being split up and mailed to our creditors! Are they sending payments to *all* creditors or just the ones that own the property we are keeping? I hope they haven't been sending our money to the credit card companies!

Is it just a preliminary arrangement until we go to court and get a final ruling? Will we get that money back? Will it get sent to the attorney to cover attorney's fees, like I originally thought? Or have we been 'duped' by our attorney?

I have a feeling this whole process is about to get even more confusing.