What Is a Statement of Creditors in Bankruptcy?
Full Financial Disclosure
- You are required to submit a statement with the court, listing all of your debts and the amounts you owe to each creditor, when you file for bankruptcy. This statement of your creditors is used by the court for several purposes, including informing creditors of your bankruptcy filing and assessing your ability to repay your debts in the short term and in the future. Any creditors you leave out of this statement are not included in your bankruptcy and may continue to pursue you to collect debts as soon as your bankruptcy is finalized. If you leave creditors out of financial disclosure documents for the purpose of filing for a chapter of bankruptcy, you might not otherwise qualify for the bankruptcy, and the court may reject your claim.
Proof of Claim Documents
- A proof of claim document is a written statement from a creditor in response to your bankruptcy filing. This document is sent to the court so the trustee in charge of your bankruptcy can verify the amount you owe the creditor by comparing the creditor's assessment of your debt versus any documentation you submitted. Once verified, the trustee knows how much to provide the creditor after your assets are liquidated in a Chapter 7 bankruptcy. A creditor may also submit a proof of claim to participate in the organization of a repayment plan under a Chapter 13 bankruptcy. A secured credit holder, including a lien holder or mortgage lender, is not required to file a proof of claim statement with the court for inclusion in a bankruptcy case.
- A Chapter 7 bankruptcy case with no assets requiring liquidation is referred to as a "no-asset bankruptcy." In these cases, a statement of creditors may or may not be necessary, because all your unsecured debts are liquidated without payment to creditors. An unsecured creditor may not wish to send the court a proof of claim document, in hopes of the debt surviving the bankruptcy process. This may allow the creditor to resume collection practices against you.
Meeting of the Creditors
- The 341 hearing, also known as the meeting of the creditors, is usually scheduled within 20 to 40 days of your bankruptcy filing. During this hearing you are required to answer questions from your bankruptcy trustee while under oath. These questions center around your finances and the statement of creditors you submitted to the court. Your creditors may also attend this hearing and ask questions. Your only obligation is to answer questions truthfully. Lying while under oath carries the penalty of perjury, which could land you in federal prison.