Don’t panic! The “Section 341” or “Meeting of Creditors” is a normal part of the bankruptcy process. The Section 341 meeting is usually scheduled within thirty (30) days of the filing of your petition. You will receive a notice from the Bankruptcy Court designating the date, time and place of your Section 342 meeting. Your Chapter 7 Trustee is typically a lawyer selected randomly from the Court’s panel of Trustees. Your Chapter 7 Trustee presides over and administers your case. Creditors are invited to attend, but in 33 plus years of representing debtors in bankruptcy, having a creditor appear at your section 341 meeting is extremely rare. It has been decades since creditors have made it a regular practice to appear at Section 341 meetings. Most cases are considered “assetless” and the notice of your Section 341 meeting essentially tells the creditors “don’t call us, we’ll call you!
At your Section 341 meeting, your case will be called by your Trustee. You will be sworn in and your identity confirmed. Once that has been accomplished, the Trustee will proceed to review your petition and examine you. I always advise clients and potential clients that the “anxiety of the Section 341 meeting is much worse then the reality of the Section 341 meeting.” Section 341 meetings usually run about five (5) minutes and most clients thank me for my statement.
So with that being said, to get you prepared and assuage your concerns, let’s look at what happens at a Section 341 meeting?
1. The Role of the Trustee – The trustee’s main task is to sell nonexempt property to repay general unsecured creditors. The trustee also looks for bankruptcy fraud, makes sure your paperwork is accurate, and conducts an investigation into your property and your finances. The trustee does much of this fact finding in the meeting and prior to the meeting of creditors. If you file for Chapter 7 bankruptcy, you must attend the meeting of creditors.
2. What to bring with you to the creditors meeting. A debtor is required to provide two (2) forms ID to the Section 341 meeting; photo ID (driver’s license, passport) and proof of the debtor’s social security number (social security card, 1099, W-2). Some Trustees in advance of the Section 341 meeting will request from your attorney certain documents. These can be copies of your mortgage statements, a copy of your recorded homestead, a fair market value analysis of your home and/or other real estate. Some Trustees may request that your attorney review and have you execute certain affidavits as to the accuracy of the information in the debtor’s petition, information concerning real estate and confirmation of the existence or lack of Probate Court orders or alimony and child support obligations. You are also required in advance of the Section 341 meeting to provide pay stubs for the sixty (60) days prior to the Section 341 meeting and your most recently filed tax return to your Trustee. The productions of these documents should be coordinated by you bankruptcy attorney.
3. Location of the Meeting. Your Section 341 meeting usually takes place in a meeting room, often in a federal building, but not usually in a courtroom. It can best be described as a conference. Your Chapter 7 Trustee preside and along with his/her assistant will be at the front of the room. Your Chapter 7 Trustee is not a judge, but is typically an attorney. Your Chapter 7 Trustee conducts the meeting. Again, remember “the anxiety of the meeting is worse then the reality!”
4. What will happen at the meeting? Generally the Trustee and any creditors that do choose to show up will ask you questions pertinent to your bankruptcy case (N.B. Creditors normally do not appear. If your Chapter 7 is an assetless, the notice to creditors tells them that there are no assets available; don’t call us, we’ll call you). The 341 meeting is the trustee’s opportunity to ask you about information in your paperwork, such as property values and past financial transactions. Creditors may ask you if you intend to keep certain pieces of property and ask you questions about the condition of the property. Other creditors may appear to investigate whether the Chapter 7 case is filed in good faith or to find out if you intend to repay them. A creditor may also show up if they feel you have gone of a “shopping spree” immediately prior to filing for bankruptcy. There are time restrictions involved that protect the creditor in this case. Most of the time, though, it is rare for creditors to take the time to attend these meetings. For a list of possible questions that you can prepare for see the following list at http://www.nolo.com/legal-encyclopedia/meeting-creditors-chapter-7-bankruptcy.html
5. What will happen after the meeting? You will heave a sigh of relief and marvel at how it was not as a process as you anticipated and, most importantly, life will go on!