It’s a common thought that if you file bankruptcy, the Judge or Trustee will get angry and yell at you. Definitely not true! First, in the normal case, you will like not appear before an actual Bankruptcy Court Judge. Instead, you will appear before a Bankruptcy Trustee, who is the court official responsible for conducting the mandatory Section 341 Meeting of Creditors. Everyone who files a bankruptcy case must appear to answer questions at such a Meeting. This is true whether it’s a Chapter 7, Chapter 11 or Chapter 13 case. Yes, your creditors may also appear, but it is unlikely that they will appear.
Most bankruptcy meetings are conducted very calmly and quickly. Although you may fear a tongue-lashing about having gotten into debt, I’ve handled over 1,500 bankruptcy cases and I’ve never seen that happen. Yes, your Bankruptcy Trustee will ask you how you got into debt. But you’re not required to make a long explanation. Instead, there are four categories of answers that the Trustee has on his checklist: (1) overspending; (2) medical problems; (3) loss of income or (4) divorce or separation. You are required to pick one of those four explanations. And it’s rare that you are asked to expand upon your answer.
I have noticed however that if your unsecured debt (such as credit cards and personal loans) exceed $100,000 in a Chapter 7 case, then the Trustee will usually inquire as to how amassed such a high amount of debt. You should just explain the circumstances. Usually, it’s due to a failed business or to having done many credit card balance transfers (robbing Peter to pay Paul, so to speak).
But yelling, well, no, you won’t find that in Bankruptcy Court!