Do I Need to Go to Court If I File for Bankruptcy in Pennsylvania?

If you are contemplating filing for bankruptcy in Pennsylvania, you don’t have to worry that going to court will consume much of your time. Laws of civil procedure govern bankruptcy filings in different ways than traditional civil cases. The U.S. Bankruptcy Code provides a structure where court appearances are situation-specific. Hearings requiring a client’s presence usually occur when there are concerns legal rights at stake can be violated without proper judicial review. Since bankruptcy filings can involve individualized plans or payment schedules, the U.S. Bankruptcy Code doesn’t require you to go to court every time there is a modification of no real consequence to the rights of either party. Moreover, if a court hearing is needed and you are required to attend, you will be notified well in advance; this will depend mostly on issues related to the type of bankruptcy you file or if there is a dispute requiring judicial review. Also, every district in Pennsylvania implements its own rules when it comes to court hearings.

Here the attorneys of Young Marr and Associates explain the nuances of a frequently asked question: do clients need to go to court in Pennsylvania after filing a bankruptcy petition? As seasoned bankruptcy practitioners with a track record of 30 years and 10,000 successful filings, we understand that having to go to court is a major concern for individuals seeking bankruptcy protection.

When is a Court Attendance for Bankruptcy in Pennsylvania?

In any meeting your presence is required, your attorney will also be present. These are the most common appearances to consider:

The 341 Meeting

The Bankruptcy Code specifies that a 341 Meeting must be held and that the debtor must provide a valid excuse–such as an illness or hospitalization–if he or she is unable to attend. And considering the consequences of the 341 Meeting, you may not want to miss this conference. The term 341 Meeting stems from the section of U.S. bankruptcy code governing this conference. There are limited circumstances when participation by telephone appearance is allowed. Most attorneys will review debt documents before the 341 Meeting. You are also required to bring proof of income, including tax returns, copied bank statements and other relevant information. Often, court hearings are held based on the information provided in these 341 Meetings and important issues are discussed.

There are multiple reasons why attending the 341 Meeting is required since it serves to protect the debtor’s best interest. While creditors rarely appear in the 341 Meeting, when they do, is usually because they want to claim a disputed security interest or because there is disagreement about an amount owed.  Attendance to the meeting can ensure that the U.S. Trustee hears your side.

The U.S. Trustee leads the 341 meeting. The U.S. Trustee is an attorney designated under the U.S. Bankruptcy Code to review your debts. His role serves to ensure there are no U.S. Bankruptcy Code violations in the decisions regarding debt “discharge” or elimination—essentially lawfully deciding what will be sold and distributed to pay your debts. The U.S. Trustee generally leads this meeting. The information learned in the 341 Meeting serves many purposes. For example, everyone who files bankruptcy has to “pass” the “Means Test.” The Means Test is the legal analysis used to determine eligibility to file for bankruptcy and if the petition corresponds to the appropriate chapter of the U.S. Bankruptcy Code. Your attorney will likely discuss the details of the Means Test at the onset of the case.

Moreover, at the 341 Meeting, the U.S. Trustee orally examines debtors to ensure that he or she is competent and understands the consequences of filing for bankruptcy, and will typically as the following questions:

  • The potential consequences of seeking a bankruptcy discharge and the effects on credit history.
  • The reasons for filing under a particular chapter of the U.S. Bankruptcy Code.
  • The result of reaffirming debts that will have to be paid even after discharge under the U.S. Bankruptcy Code.

The information provided in the 341 Meeting is usually of great benefit to debtors. For example, this is an opportunity to learn about the “automatic stay” and what collection attempts are prohibited. The “automatic” stay is the provision that protects debtors against collection attempts during the pendency of the bankruptcy.

Court-Requested Hearing to Discuss Bankruptcy Filing Issues

Your attorney will usually be able to advocate on your behalf in most court appearances—on his or her own. However, every case is different. Courts monitor bankruptcy filings and will be concerned for a debtor if a lawyer is making costly modifications to the payment schedule or if there is an important right at stake. When this happens, the bankruptcy judge will ask the debtor to be present at a hearing—this is typically intended to ensure that the debtor is aware of the consequences of a particular decision. In these instances, you will receive an appearance notice.

When the bankruptcy court determines that the debtor’s presence is needed, you will receive a letter with a notice to appear in court. The notice will provide the date and time when the meeting will take place.

Debtor-Requested Court Hearing

There are instances when it’s best to ask for a hearing. For example, in complex bankruptcy cases, debtors can file a motion for the scheduling an “Expedited Hearing” in instances where the creditor has violated the automatic stay, or if some issues require judicial review.

Call Pennsylvania Bankruptcy Attorneys You Can Trust

In troubled economic times, the last thing you need is to commit to a situation that will consume a significant amount of your time. When you are struggling to keep afloat, you can file for bankruptcy without having to lose valuable time. To learn more about frequent court appearances upon filing for bankruptcy, contact the attorneys of Young Marr and Associates for a free and confidential consultation. Call (215) 701-6519 to schedule a meeting.