The creditors’ meeting, otherwise known as 341 meeting, is a procedural step in every Chapter 7 and Chapter 13 bankruptcy. In a typical 341 meeting, the debtor will be asked questions under oath by the bankruptcy trustee with respect to his or her financial affairs. Most debtors are apprehensive of the 341 meeting. While 341 meeting is also designated as the first meeting of the creditors, creditors seldom come to the first meeting, and there isn’t usually a second meeting. Most of the time, it is a meeting of the debtor and the trustee appointed in the case. Typically, the hearing will be scheduled about 30 days from the date of the petition filing. The hearing, although somewhat informal, is an important part of a successful bankruptcy case. Most bankruptcy hearings are predictable, run smoothly and take very little time.
You will always be more relaxed and do better, however, if you know what to expect. Most consumer debtors will be called upon to appear at one or two hearings. Some cases do require your attendance at others. This blog is written for you to paint a picture about what to expect and what to do when you are told to come to Court for a 341 hearing.
The debtor is required to appear and your case will be dismissed if you fail to appear. Every debtor is entitled to have an attorney appear with them.
It is important to remember that this is simply a "fact-finding" hearing, that although the trustee has much decision-making power over the case, is not a judge. Any dispute at the hearing will be heard in front the judge assigned to the case.
OVERVIEW OF HEARING
The overall purpose of the meeting is to determine that you honestly represented your assets, income and debts in the filed petition. The trustee will swear you in and check your picture ID and original social security card against prior submitted documents.
Although creditors are entitled to appear and ask you questions as well, that is rare. Usually, only "private" creditors (as opposed to institutional/bank creditors) appear at the hearing.
Specifically, hearings typically last 15 minutes or less and are recorded on tape. It is a chance for the trustee to verify information listed in your filed petition and discover if any asset or liability is missing or listed incorrectly.
Some Trustees ask only a few questions, others ask many, it is critical that you answer all the questions truthfully!
These are examples drawn from actual hearings:
1) State your name and current address for the record.;
2) Did you sign the petition, schedules, statements, and related documents and is the signature your own? Did you read the petition, schedules, statements, and related documents before you signed them?;
3) Are you personally familiar with the information contained in the petition, schedules, statements and related documents? To the best of your knowledge, is the information contained in the petition, schedules, statements, and related documents true and correct? Are there any errors or omissions to bring to my attention at this time?;
4) Have you read the US Trustee's statement posted in the Court room;
5) Are all of your assets identified on the schedules? Have you listed all of your creditors on the schedules?;
6) Do you owe any domestic support obligations;
7) Have you have transferred any property in excess of $1,000.00 in the 2 years preceding the filing;
8 ) Have you sold any real estate in the 4 years prior to filing;
9) Have you previously filed for bankruptcy?
10) Has anyone in your family died within the last year or do you expect any inheritance within the next 12 months?
11) Are you planning on reaffirming any property? Are you planning on surrendering any property?
12 ) Did you receive an income tax refund? What did you do with the money?
13) Do you have any stocks and/or bonds?
14) Do you have any cash value in life insurance policies?
15) Have you made any large payments, over $600, to anyone in the past year?
16) Do you have any winning lottery tickets?
17) Do you anticipate that you might realize any property, cash or otherwise, as a result of a divorce or separation proceeding?
18) Have you been engaged in any business during the last six years? If yes: Where and when? What happened to the assets of the business?
19) Is the copy of the tax return you provided a true copy of the most recent tax return you filed?
SOME TIPS TO REMEMBER
There is simply no reason for the debtor to experience anxiety or worry over having to attend the Chapter 7 or Chapter 13 “341” Hearing. That being said, we fully understand and appreciate that there is nothing that we can write on this web page that will entirely alleviate the fear of walking into a federal court for the first time.
Arrive on time - You will have a specific time, place and trustee assigned to your case. It is important to appear on time, first to have a chance to review your file with your attorney for any last minute changes and also to avoid the possibility of your case being either put over to next hearing date (usually delaying things at least a month) or worse, having your case dismissed.
Leave kids at home/sitter - You will be nervous, this is understandable. However, you will want to listen to other cases being heard before yours. You get a good sense of what the trustee is going to ask you about, you don't need any distractions here if you can at all help it.
Wear nice clothes - This is federal court. The trustees, judges and court personnel all carry themselves at a high level. If you show up at your hearing like a "hobo" not only will the trustee see through your attempt to look "poor", the trustee will most likely feel you are not taking the process seriously and question you more closely and forcefully than if you showed up in Court more formally dressed.
Keep in touch with your attorney - Make sure you review everything with your attorney a day or two before the hearing, especially if there is any changes in your circumstances.
Picture ID/Social Security Card - Make sure to bring both of these items to the hearing and have them out and ready for inspection by the trustee. It is the quickest way to have your case adjourned if you forget to bring them.
The 341 meeting is not a test or a trial. The trustee won’t be asking any trick questions. Your lawyer is there for support and to make sure that the record created is truthful and accurate. In order to have a successful 341 meeting all the debtor has to do is to follow these four steps: (1) tell the truth; (2) listen to the question; (3) let the trustee finish before you start speaking; and (4) answer in as few words as possible.