What are the top 11 things you should know about the bankruptcy meeting of creditors, also known as a “341 meeting”?
Every person who files bankruptcy must attend a meeting of creditors.
The meeting of creditors is scheduled by the clerk of the bankruptcy court shortly after a bankruptcy case is filed, together with other important dates, deadlines, and events.
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The bankruptcy clerk will send notice of the time and place of the 341 meeting to all parties that are listed in the bankruptcy filing. The meeting of creditors is presided over by the bankruptcy trustee that was appointed in the case. The meeting is an opportunity for the bankruptcy trustee and creditors to question the debtor under oath regarding their assets, liabilities, and other matters that pertain to their bankruptcy case.
A meeting of creditors is not an opportunity for creditors to pressure individuals that filed bankruptcy, or embarrass them.
When the case is called for the meeting, the bankruptcy trustee will place the individual that filed bankruptcy under oath and confirm their photo ID and 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.
For a Chapter 7 bankruptcy or Chapter 13 bankruptcy meeting of creditors, there may be approximately ten cases scheduled over an hour-long calendar.
As with all matters affecting a bankruptcy case, the 341 meeting of creditors is important to bankruptcy attorneys and their clients, and should be approached with care.
Here are the top 11 things to know about the bankruptcy meeting of creditors:
1. You Must Attend The Meeting Of Creditors.
The meeting of creditors is the only mandatory appearance that most parties must make after filing bankruptcy. The 341 meeting must be attended when scheduled, and both spouses must appear if the bankruptcy is a joint case.
There will be several weeks of advance notice, so make arrangements to attend, and plan to be there with your bankruptcy attorney a few minutes early. At the meeting room, there will be an information sheet from the trustee that you must read. Be prepared to confirm that you’ve reviewed that information.
2. Most 341 Meetings Of Creditors Are Being Held By Telephone Or Video Conference During The Pandemic.
The U.S. Trustee is presently conducting 341 meetings by telephone or video appearance in all bankruptcy cases filed during the period of the President’s “Proclamation on Declaring a National Emergency Concerning the Novel Coronavirus Disease (COVID-19) Outbreak.”
However, notwithstanding this general policy, the U.S. Trustee may approve a request by a trustee in a particular case to continue a 341 meeting to an in-person meeting in a manner that complies with local public health guidance, if the U.S. Trustee determines that an in-person examination of the debtor is required to ensure the completeness of the meeting or the protection of estate property.
If an in-person meeting is required, which would be rare during the pandemic, the 341 meeting locations for Seattle and Western Washington are found here. The 341 meetings for Spokane and Eastern Washington are found here.
3. There Will Be Several Meetings of Creditors Scheduled At The Same Time As Your 341 Meeting.
The time set for the meeting of creditors will be used for a number of individual meetings of creditors. It is not unusual for ten or twelve meetings to be scheduled for the same time. Cases are called one by one, and the parties and their bankruptcy lawyer will sit at a table with the bankruptcy trustee.
It is a public meeting, with maybe twenty-five or thirty debtors and attorneys in attendance. Everyone is there for the same reason, and everyone shares the same concerns and apprehension, but the 341 meetings are conducted quickly, and with respect and courtesy.
4. You’ll Need To Verify Your Identity.
Every bankruptcy attorney and bankruptcy trustee has their stories about mistaken identities, and the issues that follow. Although the bankruptcy system is built on trust, it is also built on verification. The trustee is required to verify your identity with photo identification, and a document showing your social security number – such as your social security card, or a pay stub.
5. It Is Unlikely That Your Creditors Will Attend The Meeting of Creditors.
All parties listed on the bankruptcy schedules will receive notice of the meeting of creditors. If any creditors do attend the 341 meeting, it is typically out of curiosity, to ask whether their debt will be reaffirmed, or to ask about the location and condition of their collateral.
In most cases, the meeting of creditors is not attended by any of the debtor’s creditors. The purpose of the meeting of creditors is largely informational, and the lack of participation by a creditor does not provide an advantage or disadvantage to them or to the debtor.
6. The 341 Meeting Of Creditors Is Not A Court Hearing.
The bankruptcy law prohibits the bankruptcy judge from attending the meeting of creditors. Although the meeting of creditors is serious business, it is not a court hearing. No legally binding decisions can be made for you, or against you.
Nevertheless, the 341 meetings are recorded. Be careful and thoughtful with your answers, and don’t guess as to facts you don’t know.
7. Your Bankruptcy Trustee Will Preside Over Your Meeting.
The bankruptcy trustee will always preside over the meeting of creditors. The trustee will review your bankruptcy schedules prior to the meeting to identify any possible assets that are beyond your ability to protect, or any payments that were made before filing that the trustee may be able to recover.
Bankruptcy trustees make very little money in the usual case, so they learn how to quickly separate the cases where there are no assets from the cases where there may be assets.
8. You Must Tell The Truth At The 341 Meeting Of Creditors.
The Trustee and any creditor or other party in interest is entitled to ask questions regarding your assets and liabilities, as well as any questions that are relevant to the administration of the bankruptcy case, or your right to a discharge.
Be prepared to raise your right hand, be placed under oath, and tell the truth with an honest and open heart. The only wrong answer to a question from the trustee or a creditor is an untruthful answer.
9. The Trustee Will Ask Required Questions.
The trustee will have questions that the trustee is required to ask, including:
· 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?
10. The Trustee May Ask Additional Questions.
The trustee may have discretionary questions. 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.
The trustee may, for example, ask:
· How did you value your home?
· How did you value your car?
· Do you have any claims against anyone?
· Are you expecting an inheritance?
· Have you transferred any assets?
11. The Conclusion Of The Meeting Of Creditors Will Bring A Feeling Of Relief.
The trustee will adjourn the 341 meeting of creditors when all questions have been asked and answered, which often takes less than five minutes.
For most parties that file bankruptcy, there are no Court hearings with a judge, and the meeting of creditors is the only face-to-face interaction with the trustee or the court system.
In the majority of cases, the bankruptcy proceeding will automatically proceed to a discharge of debt after the 341 meeting is adjourned.
It is entirely natural to focus some nervous energy on the meeting of creditors, but most people say “that wasn’t so bad” when the meeting is over.
For many people, the conclusion of the meeting of creditors is the time when their relief from debt seems real, and they experience the opportunity of their fresh start and start to move forward with a second chance.