The Meeting of Creditors, often referred to as the “341 Meeting” due to the section of the Bankruptcy Code requiring the Meeting of Creditors, is an important step in the bankruptcy process. This post is meant to clarify what a 341 Meeting is, what takes place at the 341 Meeting and to dispel a lot of common misconceptions about how they work.
While most people are nervous about the 341 meeting, as long as you are truthful with the Trustee and your petition is accurate, you need not be worried about this meeting.
1. You Will Not Be Harassed or Humiliated at your 341 Meeting of Creditors.
A 341 meeting means you might have to sit down at a conference table with the Trustee. While the title is “Meeting of Creditors,” it is actually rare for a creditor or an attorney representing a creditor to appear at the meeting. Most often, a former business associate, friend, spouse or significant other who claims they are owed money by you will appear to question you. The Trustee will control any irate creditor and will not allow the creditor to harass a Debtor.
Usually, it is only the Trustee who will question you at the 341 meeting. The meeting is a formality and the only questions asked will be about your income, expense and financial assets to determine if your petition is accurate and to make sure that all of your assets have been properly disclosed and listed in your bankruptcy.
2. You Must Attend the 341 Meeting of Creditors.
You have to attend the meeting of creditors to move your bankruptcy forward. This meeting is mandatory. If you miss the meeting, even if you have everything else in order, there is a very good chance your trustee will move to dismiss your bankruptcy case.
The 341 meeting is not stressful or long, usually the questioning is less than 10 minutes. As discussed above, many times creditors do not even show up.
3. You Will Be Asked to Verify Your Identity.
When you file a bankruptcy petition, it is very important that the names be accurate, including any middle name(s) and correct on all paperwork. To do this, your trustee will check your government-issued ID against the papers in your bankruptcy case to make sure everything matches exactly, including your social security number.
What should you bring to a 341 meeting? In addition to an original of your social security card, you must have any one of these valid forms of ID for the Trustee:
State Photo ID
Armed Forces ID
Resident Alien Card
4. You Will Need to Supply Documents to Your Attorney for the Trustee.
The Trustee will want to see proof of the value of your assets. You will need to supply this to your attorney. Examples of these include: bank account statements covering the date of the filing of your bankruptcy petition and six months before the filing; real estate values; mortgage balances; auto loan balances; life insurance cash value; stock brokerage statements and other documents which let the Trustee know the value of your assets and the balances owed on any secured debts. The Trustee will also need to see six months of pay advices and your last filed federal and state income tax returns.
5. Chances Are None of your Creditors Will Be There.
In a Chapter 7 case, the U.S. Bankruptcy Court Clerk’s office will send a notice of the scheduling of the meeting to all of your creditors. In a Chapter 13 case, the Trustee schedules and sends out the notices. The notices are sent to the creditors listed in your bankruptcy documents. The creditors are given the opportunity to attend and ask any valid questions they may have. However, creditors usually will not attend. Unless you are trying to discharge a high-value debt, did something apparently fraudulent, or they plan to file a pleading challenging your filing, you generally should not expect a problem from your creditors. However, a former spouse, significant other or friends who may have a claim against you will tend to show up at the creditor’s meeting.
For most consumer bankruptcies, it will just be you, your attorney, and the bankruptcy trustee at a conference table.
6. The 341 Meeting is Not a Courtroom Hearing.
A lot of people are scared about going in front of a judge, but the bankruptcy judge isn’t even allowed to be at your meeting. The 341 Meeting is just a formal meeting with your Trustee. It is not a courtroom, and you are not being interrogated or challenged.
7. You Must Tell the Truth.
During your 341 Meeting, you will be asked to answer questions under oath. You are swearing that you are going to answer all of the questions truthfully. The only wrong answers to the questions asked is a dishonest answer.
The point of the Trustee’s questions (and any posed by any creditors who appear) is to verify that you are aware of the content of your bankruptcy filing, and swear that it is true and correct.
Some questions are meant to determine if you have any non-exempt assets or if you have made any recent payments to creditors that might be reversible by the Trustee.
The Trustee will also look to see if you tried to abuse the bankruptcy laws. An example is where you go on a spending spree just prior to filing for bankruptcy. There are different rules regarding if you take out a loan or purchase what is considered a luxury item within a certain number of days prior to filing for bankruptcy protection. If you make these purchases or take out these loans, it may appear that you planned to file for bankruptcy.
An example of an improper payment that the Trustee would attempt to uncover is where you have just paid your close friend the full $15,000.00 that you borrowed from him four years ago and now you have no money left to pay to any other creditors.
Be careful and thoughtful with your answers, and do not guess as to facts.
Just answer the questions honestly. If something was left out of your bankruptcy, you should immediately bring it to the attention of your bankruptcy attorney. Most of the questions that you are asked are to confirm the information in the Bankruptcy Petition that you already provided to your attorney.
8. Your Trustee Runs the Meeting.
Before the 341 Meeting, the bankruptcy Trustee who was appointed to your case by the Office of the U.S. Trustee, a component of the Department of Justice, will review your documents and prepare any secondary questions. At the meeting, he or she will run the meeting.
The Trustee will record the meeting, swear you in and verify your identity, and ask questions. The Trustee will also determine what questions you may be asked by any creditors who appear for the meeting of creditors.
If there are open issues, the Trustee may require you to provide further documents and to return for another meeting. The best way to avoid a return appointment is to provide all documents to the Trustee in a timely manner, generally no later than a week before the meeting.
9. Trustee Standard Questions at the 341 Meeting.
Everyone who files for Bankruptcy will face similar questions from their Trustee no matter what the facts of their case are. These include things like:
* Did you review your bankruptcy schedules prior to signing?
* Are your bankruptcy schedules true and correct?
* Do you have to make any changes to your schedules?
* Do you owe another person child or spousal support?
* Did you list all of your assets on the Schedules?
* Did you list all of your creditors on the Schedules?
* Did you list all of your income?
* Do you have any other sources of income?
* Is the tax return that you have supplied a correct copy of your tax return?
* What is the reason for your filing for Bankruptcy protection?
* Do you have a claim against anyone?
* Can you sue anyone or are you suing anyone for injuries?
* How did you get the figures for the value of your house or your auto?
* Do you have any Life Insurance Policies that you can borrow against?
* Has anyone passed away that might cause you to inherit property or money?
* Have you paid any creditors more than $600.00 in the 90 days prior to filing your bankruptcy petition?
* Have you paid any “insider” creditors in the 1 year prior to filing your bankruptcy petition? An “insider” is generally a relative or business partner.
* Have you sold or given away any assets in the last 2 years?
* Have you owned or operated a business in the last 6 years?
10. You Are On Your Way To Zero Debt.
It should take only a few minutes to ask and answer all the questions during the 341 Meeting of Creditors, at which point you may finally feel the relief from debt. Typically, a person that files for bankruptcy will not have to face a judge. The only face-to-face interaction will be with the Trustee during this Meeting.
Most of these 341 Meetings go smoothly, if you have given your attorney all of the information he or she has asked you for to prepare the bankruptcy petition and schedules.
11. The Trustee Issues a Report of Your Assets.
After the Trustee has concluded the 341 Meeting of Creditors, he or she will typically file a report that you have no non-exempt assets. If there are non-exempt assets, a notice will be sent to your creditors to file a proof of claim.
12. How to Dress for the Meeting of Creditors.
When attending the 341 Meeting of Creditors, you should dress neatly. It does not need to be a suit or anything formal.
13. What to Avoid to Ensure that Your Bankruptcy 341 Meeting of Creditors is a Positive Experience.
What absolutely not to do at a 341 Meeting of Creditors:
* Lying to the Trustee. That is a federal criminal offense.
* Hiding assets. Do not think that you are the only one who knows the assets, and there is no way for the Trustee to find out about your vacation home or your secret bank account.
* Withholding information. If it comes out that you intentionally withheld information from the Trustee, or willfully gave false answers then what was a Bankruptcy proceeding to make your financial life better, can then turn into a criminal proceeding. Always tell the truth to your attorney when filing the Bankruptcy Petition and at the Meeting of Creditors when answering the Trustee’s questions. Intentionally not listing that you have a stock brokerage account with stocks in it and then lying to the Trustee when he or she asks you if you own any stocks or bonds, other than retirement accounts is a crime – something you certainly would wish to avoid.
14. What to do if you inherit property, or you think you will inherit property soon.
If you inherit property within six months of the date that you filed a Chapter 7 Bankruptcy Petition, or at anytime during a Chapter 13 case, you need to let your attorney and the Trustee know what type of property you have inherited. Any property that you inherit within six months of the date of filing the Bankruptcy becomes property of the Bankruptcy estate in a Chapter 7 case. If you know that someone is leaving you property in their will, and it appears that they will die with in the six months of the filing, you need to let your attorney know this as bankruptcy may not be your optimal solution in that situation.
15. How long does it take to get a discharge after the 341 meeting?
Approximately 60 days in most cases.