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Top Ten Bankruptcy Mistakes: Failure to Cooperate

TOP TEN BANKRUPTCY MISTAKES

 

#8

Failure to Cooperate

Under the Bankruptcy Code the debtor has significant duties to cooperate with the Trustee. At 11 USC 521 the Bankruptcy Code requires the debtor’s cooperation in assisting the appointed Trustee. The actual duties are set forth very broadly in 11 USC 704 and includes the debtor’s duties to assist the Trustee in litigation.

The debtor must also assist in turning over all books and records to the Trustee. The duty to assist further  extends to attending and cooperating at the Meeting of Creditors required by required by 11 USC 341. The scope of the examination is also quite broad and includes: “The acts, conduct, or property or to the financial condition and liabilities of the debtor, or to any matter which may affect the administration of the debtor’s estate, or the debtor’s right to a discharge.” Bankruptcy Rule 2004(b).

Under local practices in Michigan the Trustee may file a Motion to Dismiss for Failure to Attend the 341 Hearing. In addition, the Trustee or creditors may request more extensive hearings and examinations.

These matters are infrequent. However, it is important for the debtor to understand his or her responsibilities. A failure to meet them could result in a dismissal of their case for failure to cooperate. As always, bankruptcy is a matter of equity and fair treatment. A debtor expecting to receive equity must do equity in return.

[Guy Vining, a bankruptcy attorney, in metro-Detroit, maintains his office in Taylor, Michigan, where he serves the downriver communities of Monroe, South Rockwood, Gibraltar, Brownstown Township, Grosse Ile, Woodhaven, Trenton, Southgate, Riverview, Allen Park, Lincoln Park, Dearborn, Dearborn Heights, Westland, Wayne, and Ecorse. If you or a family member of friend would like a no-obligation no cost consultation/financial analysis, just call or E-mail Guy Vining of Vining Law Group, P.L.C to schedule a meeting.]