The meeting of creditors is part of every bankruptcy case. Most times, it only involves the bankruptcy trustee and person who filed Chapter 7 or Chapter 13 bankruptcy.
Written by Attorney Andrea Wimmer.
Updated October 3, 2020
One of the most important parts of your bankruptcy case will be the bankruptcy meeting of creditors – sometimes called the 341 meeting. It normally takes place in a meeting room – not a courtroom – where you’ll meet your bankruptcy trustee. Due to the coronavirus (COVID-19) pandemic, trustees are doing these meetings by phone or video conferencing for now.
Why do some people call it the 341 meeting?
That’s because section 341 of the United States Bankruptcy Code is the bankruptcy law that makes this meeting a mandatory requirement for all bankruptcy proceedings. Section 341 also says that creditors are invited to participate, but it’s pretty rare that creditors attend.
If creditors rarely show, why is it called a creditors’ meeting?
It’s because it’s really held for their benefit, even though they rarely participate. The bankruptcy trustee essentially acts as a representative for all unsecured creditors, like credit card companies. That, combined with the fact that most Chapter 7 bankruptcy cases are no asset cases that don’t pay out any money to unsecured creditors, it just doesn’t make sense for them to hire a lawyer to show up. Even though it’s really for them.
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Preparing For Your Meeting Of Creditors
The first step to preparing for a successful meeting of creditors is to make sure it’s on your calendar. It’s one of the most important dates in the bankruptcy process. You’ll get the bankruptcy court’s official notice telling you the date and time (Form 309A) a few days after you file bankruptcy. If you miss your meeting, the trustee can schedule a new date for your meeting, extending the length of your bankruptcy proceeding as a result. That’s the best case scenario. They can also ask the bankruptcy court to dismiss your case.
Then make sure you have the time off (if needed) and have child care in place for the time of your meeting. You don’t want to have to worry about your little ones while answering the trustee’s questions. If your 341 meeting will take place via telephone or video conference, make sure to plan for that as well.
Provide the trustee with the information they request when they request it.
At minimum, U.S. bankruptcy laws require that you send your trustee a copy of your most recent income tax return before your creditors’ meeting. Actually, you’re supposed to send it so they receive it at least a week before the meeting. Most trustees send a letter to debtors to ask for some additional information in preparation for the meeting.
Since every bankruptcy trustee handles things their way, what they want (and how they want it) varies for each one. The U.S. Trustee gives them guidelines, but each bankruptcy trustee does their own thing. Common items they ask for include recent pay stubs and bank statements. Chances are, whatever they ask for is already part of the bankruptcy documents you collected to prepare for your bankruptcy filing.
Review your bankruptcy forms for good measure.
A day or so before your 341 meeting, take 10 minutes to thumb through your bankruptcy paperwork. That’ll help remind you about everything that goes into the forms. During the meeting of creditors, it’s a good idea to have the forms in front of you. Sometimes the bankruptcy trustee asks about specific information in the forms, and it’ll be easier to know what they’re referring to if you have the petition in front of you.
What is the purpose of this meeting?
The bankruptcy laws require that the bankruptcy trustee check the identity and social security number of every person filing bankruptcy. If you forget to bring either a photo ID (like your driver’s license) or proof of your social security number (your social security card or last year’s W-2 will work nicely), the trustee can’t hold the meeting. That’s why it’s so important to bring both of these items.
The bankruptcy trustee has to ask every bankruptcy debtor a series of questions. The questions are provided by the United States Trustee Program, which oversees all bankruptcy trustees. Most of the questions are geared toward making sure that what’s in the bankruptcy petition is true. If there’s anything that the trustee wants more information on, they’ll ask additional questions about that as well.
What are examples of these additional questions?
They can be wide-ranging. If you filed bankruptcy to stop a garnishment, the trustee may want to know about how much of your monthly income was taken before your filing date. They may ask how you’ve determined the value of your assets or whether you expect to receive a tax refund for the current year.
The meeting is recorded, just in case.
Before you answer questions, the trustee will administer an oath by asking you to raise your right hand and swearing that you’ll tell the truth and nothing but the truth. Since the bankruptcy forms are all signed under penalty of perjury, it’s important for your answers to the trustee’s questions to hold the same kind of weight.
As long as you’ve been honest and haven’t intentionally tried to hide anything from the trustee, this is really nothing to worry about. If you realize while talking to the trustee that you accidentally forgot about something, this is your chance to let them know. They’d much rather you tell them and file an amendment.
In fact, if there are any changes you need to make at all, make sure to let the trustee know. 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 until the trustee finds out another way.
This is also the trustee’s chance to verify they have good contact information for you, in case they need to get in touch with you later. If you have any past due domestic support obligations (like child support or alimony), they’ll also want the contact information for the recipient as well.
What happens if a creditor does show up?
While it doesn’t happen often, it does happen. In that case, the creditor’s bankruptcy attorney gets the opportunity to ask you some questions about your financial situation. You’ll still be under oath and the questions (and your answers) will be part of the audio recording. That’s all that can happen. It can be nerve-wracking, but as long as you’re truthful there’s not much else that can happen that day. Since there’s no bankruptcy judge involved, no one can throw your case out or object to your discharge during the meeting. It’s strictly an information-gathering event.
How do I know if the creditor will object to my case?
While it may be possible to gauge what the creditor wants based on their questions, there’s really no way of knowing one way or the other. Creditors have 60 days from the date of your 341 meeting to make an objection but it has to be in writing. And they have to send you a copy. So you’ll know if it happens. And you’ll get a chance to tell your side of the story to the bankruptcy judge.
How does a Chapter 13 bankruptcy meeting of creditors work?
It works pretty much the same. Some bankruptcy courts combine the 341 meeting with another part of the Chapter 13 bankruptcy process, but that varies from state to state. Even though people file Chapter 13 bankruptcy for different reasons, the main goal of the meeting of creditors is still the same: Check the person’s photo id, verify their social security number, and ask them a series of questions prepared by the U.S. Trustee.
What happens after the meeting of creditors?
Sometimes the trustee will tell the person who filed for bankruptcy relief that their case is a no-asset case and they’re pretty much done with their work. In that case, all you have to do is wait for your discharge order to be entered and take the second bankruptcy course (called debtor education) if you haven’t done so already.
If the trustee doesn’t make an announcement to that effect at your meeting, that just means they haven’t finished looking at everything yet. They’ll let you know if they need something else to finish up your case either right then and there, or after the meeting. Since it’s important to cooperate with the trustee as part of the bankruptcy process, make sure to let the trustee’s office know if your contact information changes. That’s in addition to letting the bankruptcy court know.
If the trustee determines that there’s nothing that could be used to pay your creditors, they’ll file a Report of No Distribution with the court. But, if there are nonexempt assets the trustee can sell, the trustee will invite the creditors to submit their claims. In that case, the bankruptcy case will stay open even after the discharge is entered, until the trustee’s office has finished its work.
The meeting of creditors is an important part of every bankruptcy case though it rarely involves creditors. The typical Chapter 7 creditors’ meeting takes less than 10 minutes. During that time, the bankruptcy trustee checks your picture id and proof of social security number and asks you a series of questions about your financial situation. After the 341 meeting, no news is good news until your discharge can be granted 60 days later.
Check out the video below ⬇️ to see what a typical meeting of creditors is like!