Bankruptcy Code §341(a) requires the debtor in a Chapter 7 bankruptcy case to appear for examination by the trustee appointed in the case. The purpose of the meeting is for the trustee to verify the accuracy of the information filed by the debtor in his bankruptcy schedules and statement of affairs setting forth his assets and liabilities.
One of the primary duties of a Chapter 7 trustee is to locate assets that can be liquidated for the benefit of creditors. Trustees are paid a commission based on the value of the liquidated assets so they are highly motivated to locate assets that can be sold. At the meeting of creditors, trustees frequently find assets that have not been disclosed in debtor’s schedules. That situation can result in the debtor losing an asset that he would otherwise had been able keep had it been disclosed and claimed as exempt. Even more seriously, the debtor could lose his right to a bankruptcy discharge based on the failure to disclose a material asset.
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