The coach for one of the world’s most well-known mixed martial arts (MMA) fighters filed a voluntary petition for Chapter 7 bankruptcy during the summer of 2015. In re Tarverdyan, No. 2:15-bk-21909, petition (C.D. Cal., Jul. 29, 2015). The case has experienced multiple delays, with the court-appointed trustee and the debtor jointly requesting continuances on several occasions. This demonstrates many of the complicated factors sometimes found in Chapter 7 proceedings.
A Chapter 7 case allows an individual debtor to liquidate assets and use the proceeds to pay down their debts. At the end of the case, the court may grant a discharge of some or all remaining debts. Several important proceedings must take place before a court can grant a discharge. First, the trustee must hold a meeting of creditors and other interested parties “within a reasonable time” after a debtor files a voluntary bankruptcy petition. 11 U.S.C. § 341(a). This is commonly known as a “341 meeting” or “341 hearing.”
In Chapter 7 cases, the trustee must conduct an oral examination of the debtor at the 341 meeting in order to make several findings, including the “potential consequences” for the debtor of a discharge, the effect of a discharge on creditors and others, and whether the debtor could file under a different chapter. Id. at § 341(d). Once the trustee has obtained all the required information from the debtor, they must decide whether to recommend or oppose a discharge of debt based on these findings.