What happens at the 341 Meeting of Creditors?

First, the 341 hearing is held within 30 days of the filing of your petition. Usually, creditors do not appear at this hearing to ask you any questions. Frankly, it can be a waste of time for the creditor.

However, sometimes a disgruntled landlord will appear or in the case of a photographer who has filed a Chapter 7 petition and has taken wedding photographs, all the wedding customers will be there demanding their photographs.

Usually, just the attorneys and their clients are there at the meeting.

The Trustee represents the creditors and the Trustees are very experienced in bankruptcy and unless there are exceptional circumstances, will do a better job representing the interests of the creditors than the creditors, themselves.

The Trustee will ask you a serious of questions which are standard questions but many Trustees like to throw in a ‘new twist’ of a question to keep everyone on their toes.

The most important question the Trustee ask is as follows:

• Did you read the petition before you signs it?
• Did you list all your assets?
• Did you list all your debts and obligations?
• Are you familiar with the content of the documents?

1) Did you read the petition before you signed it?

You have to have taken the time prior to signing the petition to read it, page by page. If you answered, ‘No, I didn’t read it before I signed it’, your entire case would or could be rejected.

2) Did you list all of your assets?

You are required by the Code to list all of your assets. Now many people don’t think of ‘receivables’ as an asset. But they most certainly are assets. If someone has recently died and you could inherit money or other assets, this is a ‘potential receivable’ and must be listed in your petition.

It would be a serious mistake and cause huge problems if you didn’t list this potential asset. Also, you could have a personal injury case and the award from this case is also, a potential asset and must be disclosed in your petition.

If you were a contractor and installed a roof, and all that remained was that your customer owed you money, this is a ‘receivable’ and must be listed in your petition.

3) Did you list all of your debts and obligations?

You could have been in a car accident and not at fault and you should list this in your schedules as a ‘contingent liability’ and that you ‘dispute it’.

The failure to list all your creditors is a serious issue especially post-bankruptcy when the creditor claims that because you didn’t list the creditor, the debt is not discharged.

There are arguments against this creditor which you can use but nothing replaces the ‘slam dunk’ argument that you properly listed the creditor on your petition schedules.

4) Are you familiar with the contents of this document?

In your petition you list your income and expenses and you list more information about your financial background in ‘SOFA’ which is officially called, ‘Statement Of Financial Affairs’.

If you have lost money gambling, it is important to note this fact in SOFA because attorneys for the credit card company will jump on this omission as an attempt by yourself to conceal information.

You can file a ‘skeleton petition’ without all of your schedules but you will have 15 days to submit all of your schedules. However, there are dangers in rushing your filing because you can miss important points which can come back to haunt you.

After your petition is filed, the Court’s computer system will immediately assign a date for your Meeting with the Trust at the 341 Hearing. The Court will mail you a copy of this notice and I mail a copy to my client with specific instructions.

You have to file with the Court a Statement of Intent regarding your secured debts. As I have indicated before that you have 3 choices, namely;

• reaffirm the debt
• surrender the property or
• redeem the property

Before you reaffirm, it’s best to have a thorough discussion regarding the practical implications of any reaffirmation with an experienced attorney.

Once you have filed your Statement of Intention, you have 45 days to surrender or keep your property as you indicated.

You have to submit all documents to the Trustee that he requires. These documents have to be submitted to the Trustee 10 days before the 341 hearing. Failure to deliver these documents within 10 days can result in a Motion to Dismiss your case.

The list of Statement of Intent documents are;

1. all pay stubs in the 60 days prior to the filing of the petition
2. State and federal tax returns for the 2 years prior to filing the petition
3. copy of recorded deeds – note, you must supply the copy from land records with the stamped volume and page and date
4. copy of recorded mortgages – from the land records
5. appraisal of real estate which is no more than 6 months old
6. monthly billing statements from mortgage companies, finance companies, and these have to set-forth the monthly payments and the mortgage balance
7. divorce judgments
8. copies of trust agreements
9. copies of statements regarding the cash surrender value of life insurance policies
10. monthly billing statements from finance companies for any automobiles which will set-forth the monthly payment and the loan balance
11. documents the Trustee requests such as credit reports, bank statements, cancelled checks, etc.

A creditor can request a copy of your tax return. (So far I haven’t had this happen.)

Due to the fact that bankruptcy filings have been slow or have dropped in number, the 341 hearings are being scheduled within approximately 20 days of filing the petition.

At the 341 hearing you have 2 documents;

• your social security number
• your driver’s license

1) Your social security number – The Document has to have been issued by a government agency. Reproductions are not acceptable. Passports don’t have social security numbers. If you have lost your social security card, it’s a simple process to have it replaced by the social security office.

If you don’t have this document to present to the Trustee, your whole trip to the 341 Hearing is wasted because your case will not be heard.

2) Your Driver’s License – The address on your driver’s license should match the address on you bankruptcy petition. If you have moved, you have to have put the new address on the back of the driver’s license. The Trustee will usually check that your address on your driver’s license will match with your petition.

Consumers who are in the military have used their Military IDs at the 341 Hearing because they contain their social security number and are issued by the government.

The 341 Hearing is considered an informal hearing because you do not appear before a judge and you are not subjected to cross-examination.

Key points of the 341 hearing;

• the hearing is tape recorded
• you are under oath
• you are reminded not to hide or conceal assets
• the hearing lasts approximately 10 minutes
• the trustee or creditors have 30 days to object to your exemptions

The hearing is tape recorded and you will be under oath and you will be reminded that the Federal Bureau of Investigation will investigate bankruptcy crimes such as concealing or hiding assets.

You Hearing before the Trustee usually last 10 minutes and I have told many clients that it takes a full day to prepare a meals and only 15-20 minutes to consume it. Even though your time before the Trustee is relatively short in duration, the time spent in preparing your case is considerable.

Once you have had your 341 Hearing, the Trustee and any creditor has 30 days to object to any of your claim for exemptions.

After your 341 Meeting of Creditors, creditors have 60 days to object to your discharge of any debts.