The Meeting of Creditors
One of the most important parts of your bankruptcy case will be the meeting of creditors – also known as the 341 meeting. It’s a hearing held in a meeting room – not a courtroom – where you’ll meet your trustee. Your creditors are invited to attend, but a majority of the time they don’t appear in person. Also, your part will probably only last about 5-10 minutes.
In this article, we’ll break down who the trustee is, the differences between a Chapter 7 and Chapter 13 meeting, and other logistics that will allow you to be fully prepared for your meeting of creditors.
The Trustee’s Job
The trustee is the person responsible for administering your bankruptcy estate. They’re usually a lawyer, but not always. Their job is to make sure your creditors get paid as much as possible. But remember, they’re not out to get you. Make sure to be transparent and proactive with your trustee, so that they have no reason to halt your case. Since you aren’t meeting with a judge at the meeting of creditors, the trustee is responsible for facilitating it.
At the meeting of creditors, the trustee will first swear you in. Even though you are not in a courtroom, you are still under oath. Then, the trustee will ask you a series of questions. They will try to find out if you have any claims to pursue in order to get any additional money for the creditors. They need to make sure that you didn’t leave any assets or property off your papers, and that you accurately reported your income.
Chapter 7 Meeting of Creditors
If you are filing for Chapter 7 bankruptcy, you probably won’t see the inside of a courtroom or appear in front of a judge. Instead you’ll attend this one meeting of creditors. The court will set the meeting between 21 and 40 days after your bankruptcy filing date. Fortunately, Chapter 7 bankruptcy cases are completed within several months.
The trustee will simply review your paperwork for accuracy, investigate any potential fraud, and evaluate whether they should convert your case to a Chapter 13 case. This can happen if your income is deemed too high.
Also, even though creditors rarely appear, they may come to your meeting of creditors for several reasons in a Chapter 7 case. For example, a car loan lender may appear to ask if you plan to reaffirm the loan or surrender the car. Or, a creditor may come to ask about recent credit card charges. They’ll want to know if you incurred the debt with no intention of paying it.
With Chapter 7, you can discharge all of your unsecured debts, like credit card debt and medical bills. If this sounds like a solution for you, see if you qualify for Upsolve. They’re a nonprofit that helps low-income Americans in financial distress get a fresh start through Chapter 7 bankruptcy at no cost.
Chapter 13 Meeting of Creditors
Unlike in Chapter 7 bankruptcy, your debts are not all discharged, but rather arranged into a repayment plan. So, the trustee must prioritize your debts and determine which creditors get paid before others do.
In general, secured creditors, such as a car lender, are the most likely to appear at the Chapter 13 meeting of creditors. They’ll want to ask if you wish to keep or surrender the property securing their loans. The creditor will also want to verify that the loan is properly secured.
If the trustee believes that you are not paying your unsecured creditors enough, he or she can object to the confirmation of your Chapter 13 repayment plan. In this case, it is most likely that you will need to attend a confirmation hearing in front of a judge after the meeting of creditors.
Preparing for Your Meeting of Creditors
The court will send a notice of the meeting of creditors to the address that is listed on the bankruptcy petition. The notice states the date, time, and place of the meeting. You can view a blank copy of this notice here.
Before the meeting of creditors, you’ll need to carefully review your bankruptcy petition. If you find something is missing or inaccurate, you need to file an amendment before the hearing. If there are any changes you need to make at all, make sure to let the trustee know at the very beginning of the meeting.
At the end of the day, you don’t want it to look like you’re hiding something. Remember that your trustee is just another human being. They need to trust you and believe that you’re bringing this bankruptcy case in good faith. You don’t want to wait to give new information when the trustee starts asking his or her questions.
What to Bring
Since this meeting is so important and usually difficult to reschedule, you’ll want to be prepared and have everything you need. The following is a basic list of things you should bring to your meeting of creditors:
- Photo identification
- Social security card or proof of your social security number (if you don’t hav e a SSN, you’ll need a valid statement)
- Bankruptcy documents
- Proof of income
- Recent bank/investment account statements
- Documents for any expenses under the means test, if they were required
- Any documents requested by the trustee in the Notice of Meeting of Creditors
- Any documents required by local court rules
The trustee just wants to verify information, make sure there’s no fraudulent activity, and take into account any concerns that creditors may have. They will first review your petition, and ask you if the information in the petition is correct. Here are some typical questions you may be asked in your meeting of creditors:
- Have you transferred any property within the last year?
- Does anyone hold property that belongs to you?
- Will you be receiving any property from a divorce in the following year?
- Do you anticipate receiving an inheritance or life insurance payout sometime in the future?
- Do you have any legal claim to money from a business?
- Do you have any possible claims against someone due to a recent accident?
- Have you recently made any payments to relatives or creditors?
- Does anyone owe you money?
- How did you calculate the value for large items, like your house or car?
Read here for more types of questions.
What to Do if You Can’t Attend
We know that things come up, and sometimes it’s not possible to make a certain appointed time. Unfortunately, if you don’t attend the meeting of creditors at its scheduled time, the court will dismiss your bankruptcy case. If you can’t make it, you must notify the trustee immediately. They won’t accept just any excuse, so the reasons you have for not making the meeting could determine whether or not your hearing will be rescheduled.
For example, work and other travel commitments aren’t good excuses. Usually, reasons that can be excused for rescheduling your meeting of creditors include:
- Medical emergencies
- Family emergencies
- Serious medical condition
- Natural disaster
- Active military service
On the bright side, if the court does dismiss your case, you can usually refile immediately! However, you lose the automatic stay when you refile within one year of the dismissal. The automatic stay is what immediately stops creditors from trying to collect what you owe them. If your case gets dismissed and you refile right away, the automatic stay in the new matter will only last 30 days. In order to keep using it, you’ll need to file a motion to extend the automatic stay before it expires.
There are a lot of steps involved in the bankruptcy process, and this particular step is one of the most important. Being fully prepared for your meeting of creditors can make or break your case. After doing your part and coming fully prepared, you could be one step closer to relieving the heavy burden of debt.
If you are interested in Chapter 7 bankruptcy, try joining the millions of others who have used it to get the fresh start they need. See if you qualify for Upsolve, a nonprofit that helps low-income Americans in financial distress file for Chapter 7 bankruptcy for free.