Basis for a Bankruptcy Claim
After a debtor files for bankruptcy, the federal bankruptcy court is required to notify the creditors involved. In some cases, creditors may receive compensation for debts set to be discharged in a Chapter 7 bankruptcy case. If a Chapter 13 bankruptcy case is filed, creditors may approve or dispute any suggested repayment plan that is offered. Only creditors with a basis for a bankruptcy claim can participate.
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Identification
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A bankruptcy claim, also known as a "proof of claim," is an official form sent out by a federal bankruptcy court. The form is sent to creditors entitled to receive compensation for unpaid debts set to be discharged in a bankruptcy case. The court issues an official notice of the bankruptcy case. Creditors must respond to the notice by filing the official proof of claim form and attach documentation supporting claims of debt.
341 Meeting
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The purpose of a 341 meeting is to allow debtors to answer questions about assets, income and debts in a bankruptcy case. Creditors with proof of claim can attend the 15-minute hearing and ask questions about the debtor's property and finances. In Chapter 7 liquidation, a court-appointed trustee determines if assets can be sold to repay nonexempt debts. In Chapter 13 consumer reorganization, the trustee examines whether a debtor's suggested debt payment plan is executable.
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Objections
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Attendance at a 341 meeting is not mandatory to file an objection. Creditors who wish to file an objection to a bankruptcy case generally have 60 days after a 341 meeting to do so. If no objections are filed, a discharge order will typically arrive by mail within 60 days of a 341 meeting.
Sale of Assets
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If assets are sold in a Chapter 7 bankruptcy case, the proceeds are distributed to the creditors involved under a predetermined schedule. Written notification of the payment schedule is provided by the trustee and issued after the 341 meeting. Any money paid to creditors is distributed by the trustee and taken from funds collected during the sale of assets.
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