What Is the 341 Meeting of Creditors in Bankruptcy?

If you are considering filing bankruptcy, you must understand the bankruptcy process and the nuances involved.  One such important activity is the meeting of creditors, an important part of every Chapter 7 and Chapter 13 bankruptcy case. The meeting of creditors is scheduled by the clerk of the bankruptcy court shortly after a bankruptcy case is filed. It is also called the 341 hearing (because it is required by section 341 of the Bankruptcy Code) where you meet with the trustee of your bankruptcy case. It is held in a meeting room, not a courtroom. There will be no judge present. The trustee will run the hearing, and creditors may attend as well, although in many bankruptcy cases no creditors show up.

What is the role of the bankruptcy trustee?

A bankruptcy trustee is a person assigned to administer your bankruptcy case, makes sure the rules are followed and the case is resolved. The trustee has to make sure that your creditors are paid. In order to do this, the trustee will ensure that you have declared all assets or property on your bankruptcy filing and that your declared income is accurate. The trustee will also try to find out if you have any claims that can be pursued to get more money to pay back your creditors. The trustee’s specific roles depends on the bankruptcy case filed, whether it is Chapter 7, Chapter 11,  or Chapter 13.

  • With Chapter 7bankruptcy, the trustee administers the liquidation of your assets and the distribution of the proceeds to the creditors.
  • With Chapter 11 bankruptcy, which usually applies to a corporation, a trustee helps the debtor through a reorganization of a business obligations, debts, and assets in order to eventually give the debtor a fresh start.
  • With Chapter 13 bankruptcy, a trustee helps an individual looking to restructure their obligations to repay their debt over time.following a  repayment plan.

One of the trustee’s responsibilities is presiding over the 341 meeting.

What Should I Prepare Before the  Meeting of Creditors?

You must review your bankruptcy petition really well so that you do not miss out on important details. If you find that you inadvertently left out some details or you discovered incorrect information, you should:

  • File an amendment before the hearing, if possible, or
  • Be ready to present the revisions to the trustee’s attention at the very start of the hearing. The least you want to happen is to give the impression that you intentionally wanted to hide information. Clarify the corrections before the trustee starts the round of questions.

What Should I Bring to the Hearing?

Some bankruptcy cases have had stories of mistaken identities and the complications that followed. Although the bankruptcy system is built on trust, it is also built on identity verification. The trustee is required to establish your identity. As such, be ready to present a photo identification card and your Social Security card or any other document showing your Social Security number ( or a statement that you don’t have a Social Security number)

You may also be required to bring the following:

  • your bankruptcy documents
  • proof of income
  • recent statements of bank and investment accounts
  • if documentation was required for any of your expenses under the means test, those documents, and
  • any other documents that the trustee requires in the Notice of Meeting of Creditors or as required by local bankruptcy court rules.

What Happens During A Hearing?

When the case is called, the bankruptcy trustee will place the debtor under oath, and ask to see a photo ID and documentation of the debtor’s social security number. The bankruptcy trustee will then ask a series of questions to confirm the accuracy of the documents filed with the court. The trustee will try to determine whether there are any assets that are not protected through exemptions. The trustee will also try to identify other issues relevant to the administration of the estate.  Be honest and straightforward.  Remember, you are under oath. Any misrepresentation and false declaration are deemed perjury. The only wrong answer to a question from the trustee or a creditor is an untruthful answer.

What Are the Questions That A Trustee Will Ask?

The trustee is required to ask the following questions regarding your petition. It is basically a checkpoint on the accuracy of the information in your petition will review your petition and whether or not there are details omitted:

  • Did you review your bankruptcy schedules prior to signing?
  • Are your bankruptcy schedules true and accurate?
  • Do you have any changes to your schedules?
  • Did you list all of your assets?
  • Did you list all of your debts?

The trustee may have discretionary questions in order to find out more about your assets and debts. These questions are usually intended to determine whether you might have any nonexempt assets that could be claimed by the trustee, or whether there were payments to creditors or transfers of property made before the bankruptcy filing that might be recovered by the trustee:

  • How did you come up with the value for big ticket items, like your house or car?
  • How did you value your home?
  • How did you value your car?
  • Do you have any claims against anyone?
  • Are you expecting an inheritance or life insurance payout?
  • Are you expecting any tax refunds?
  • Have you transferred any assets?
  • Have you made any recent large payments to relatives or creditors?
  • Does anyone owe you money?

How Is The 341 Meeting Concluded?

The trustee will adjourn the 341 meetings of creditors when all questions have been asked and answered, which often takes ten minutes at most.

Typically, the bankruptcy proceeding will automatically conclude to a discharge of debt after the 341 meeting is adjourned.

Is There a Need for A Bankruptcy Attorney?

It may seem unnerving to face the reality of your financial situation through this 341 meeting. But more often than not, people find it relieving to finally begin their journey to a fresh start and move forward to another lease on financial freedom. However, it is crucial to be prepared so that all your efforts will not go to waste. An experienced bankruptcy attorney in Mesa will make sure you comply with all bankruptcy requirements such as completing the credit counseling classes, accurately filling out your bankruptcy forms, paying court fees, and attending the 341 meeting.  Our Pew Law Center bankruptcy lawyers are committed to helping you out in the process as you move towards a fresh start. Call us now for a free consultation.