341 Meeting of Creditors

The creditors’ meeting (341 hearing) is a critical component of each Chapter 7 and Chapter 13 bankruptcy case.

All Chapter 7 and Chapter 13 debtors are required to appear at a 341 hearing and meet with the trustee appointed to oversee the case. The trustee verifies the debtor’s identification and asks a series of questions about the bankruptcy paperwork during the creditors’ meeting. Creditors who attend may inquire about financial matters, though creditors rarely appear.

While it is natural for debtors to be concerned about the meeting, the majority are efficient and go off without a hitch. Here’s what you need to know to conduct yourself confidently during the meeting:

• preparing for the meeting
• what should be brought to the hearing
• how to obtain access to the hearing
• the nature of the questions that will be asked of you, and
• what to anticipate if creditors show up.

Approximately sixty days after the trustee closes the hearing, the majority of Chapter 7 filers receive a discharge. For Chapter 13 filers, the next step is to have their Chapter 13 repayment plan confirmed at the confirmation hearing.

Recognize the Trustee’s Role in Creditors’ Meetings

The trustee’s job is to verify your identity, verify the accuracy of your paperwork, and ensure that your creditors receive the maximum amount possible. For instance, the trustee will evaluate your assets and property and verify the accuracy of your reported income in each case. Additionally, the trustee will look for any unreported sources of income or property to pursue in order to obtain additional funds for your creditors. Finally, the trustee will examine the file for indications of bankruptcy fraud.

In Chapter 7 and Chapter 13, the trustee has additional responsibilities. The Chapter 7 trustee will sell any property that is not exempt from bankruptcy and distribute the proceeds to creditors. The Chapter 13 trustee will determine whether your proposed Chapter 13 repayment plan is feasible. The Chapter 13 trustee will continue to distribute monthly payments to creditors if the judge approves the plan at the confirmation hearing. (With certain exceptions, debtors begin making proposed plan payments approximately 30 days after filing and receive the funds back if the court does not confirm the plan.)

Preparation for the Creditors’ Meeting

Prior to the creditors’ meeting, you’ll want to carefully review your bankruptcy petition. If you discover that you’ve overlooked something or come across an incorrect entry, you should:

• if possible, file an amendment prior to the hearing, or
• be prepared to call the trustee’s attention to the issue during the hearing.

A frequent occurrence is that your name is not listed exactly as it appears on your driver’s license, passport, or government identification card. At the start of the hearing, you will present one of these forms of identification along with proof of your Social Security card number. If they do not match, you will need to amend your petition and will almost certainly be required to return a second time.

How to Prepare for the 341 Hearing

In the majority of cases, you will have provided verifying documents to the trustee prior to the creditors’ meeting. Pay stubs, bank and retirement statements, and income tax returns are frequently sent to the trustee. Certain trustees require additional documents, which you will file with the court in some jurisdictions.

You should bring the following to the hearing:

a photograph deemed acceptable I.D.

• your Social Security card or another form of identification that contains your Social Security number, and
• any documents that reflect a change in your financial situation since you filed your petition.
• You’ll probably want to bring a copy of your bankruptcy paperwork with you, as well as whatever else the trustee indicates will be required. Consult an attorney if you are unsure whether the item is appropriate.

The Creditors’ Meeting’s Logistics

Parking near a courthouse or other court facility is notoriously difficult. It’s a good idea to make parking arrangements in advance of the meeting so that you can arrive approximately fifteen minutes early. There may be multiple trustees meeting concurrently, and the additional time should allow you to find the appropriate room.

You should consult the calendar posted outside the hearing room’s door. The trustee will set approximately ten cases at the same time, so you’ll want to determine your position in the order.

There will be no judge present. The hearing will be conducted by the trustee. Creditors may also attend, although they do not appear in the majority of bankruptcy cases. You will be sworn in and the trustee will ask you a series of questions under oath. The trustee will conclude the hearing if he or she is satisfied. Otherwise, the trustee will extend it until the next business day. A continuance is uncommon if all required documents are submitted on time.

The 341 Hearing’s Length

You’ll be one of approximately ten debtors scheduled to appear at the scheduled hour. Once your case is called by the bankruptcy trustee, things move quickly. The bankruptcy trustee will ask a series of routine questions and will inquire about any outstanding issues or matters that require additional explanation. Creditors’ questions can also be brief. If they are not, the trustee will typically reschedule the debtor’s meeting to allow for additional questioning (more below). In most cases, the hearing lasts no more than ten minutes.

Typical Creditors’ Meeting Questions

The trustee will ask a series of standard questions to each debtor. The trustee will then inquire about any unique issues that have arisen in your case. Most bankruptcy attorneys are capable of anticipating the trustee’s questions and explaining the situation in advance—to both you and the trustee.

Typical questions include the following:

• Have you gone over your bankruptcy petition and schedules with a lawyer before submitting them to the court?
• To the best of your knowledge, is all of the information contained in your bankruptcy papers true and correct?
• Are you certain you disclosed all of your assets?
• Have you enumerated all of your creditors?
• Have you ever filed for bankruptcy?
• Has anything changed in the time since you filed for bankruptcy?
• Are you obligated to pay any forms of domestic support, such as alimony or child support?
• Have you filed all required tax returns on time?
• Have you made any payments to creditors that totaled more than $600 in the last year?
• Is there anyone who owes you money for whatever reason?

One of the advantages of being near the bottom of the calendar is anticipating the trustee’s request.

Expectations If Creditors Appear at the 341 Meeting

While your creditors will be notified of the 341 hearing, the vast majority will not appear. A creditor may appear in the following circumstances:

• The creditor wishes to obtain information regarding recent cash advances or credit card purchases.
• The creditor is requesting information about disclosures that are not included on a credit application, such as the amount of your income, or
• A creditor is an adversarial former business partner, spouse, or other person concerned about not being paid.
• The majority of creditors use the meeting to conduct discovery. They’ll inquire about your interactions with them in order to determine whether it’s worthwhile to object to the discharge of your debt. If the creditor has a legitimate claim, they will almost certainly agree to resolve the matter without resorting to litigation.
• If the trustee believes the matter is serious, he or she may adjourn the meeting to allow the creditor additional time for questioning. The trustee will be especially motivated to do so if the questioning reveals hidden assets, as the trustee is compensated based on the amount of money distributed.