I was at a meeting of creditors the other day watching an exchange between the trustee and debtors. Apparently, the debtors had listed some tools on their petition and were claiming a “tools of the trade” exemption. They believed that these tools were protected from the trustee, and he couldn’t sell them to give the proceeds to creditors. The issue was that the husband, whose tools these were, had recently gone to school to learn a new trade. The trustee, sensing that the tools of the trade exemption couldn’t be claimed, pounced. He began asking questions about his new training and whether or not the husband planned on going back to construction. The trustee assumed that the husband’s new trade had nothing to do with his prior vocation and that the husband wouldn’t be using his tools anymore.
The trustee was trying to get the husband “on the record” saying that he would no longer be using the tools he claimed as exempt. Once he got the husband to say that, it would be a slam dunk to object to the tools of the trade exemption. Once he did that, he could sell the tools, collect his fee and give the rest of the proceeds to creditors. Fortunately, the debtors’ attorney expected what the trustee would do and was anticipating his questions. The attorney followed up with additional questions about how the husband would still need his tools in his new line of work. I have to admit smiling when I saw the look of disappointment on the trustee’s face when he realized that his plan of attack had been undermined.
It’s important to remember that your conversation with the trustee will be on the record. He or she will swear you in, and you’ll have to promise to give truthful answers.Your attorney should anticipate what arguments the trustee will use to try to capture any of your assets for the creditors and should have a strategy for you to keep them.
For most people filing bankruptcy, the meeting of creditors is anti-climatic. Despite its name, creditors rarely appear at this meeting. Instead it’s mostly an opportunity for the trustee to ask some questions about your petition and root out whether or not there are any assets that can be distributed to your creditors. Nevertheless, the meeting of creditors can have significant consequences.
