Filing for bankruptcy can be different than dealing with other legal matters. When you file for bankruptcy, you probably assume that you will have to go to court and be questioned by a Judge. Bankruptcy cases are handled much differently than you may think. As a someone who is filing for bankruptcy, you are not required to go to court and speak to the Judge. Instead, you will be required to attend a hearing with those you owe debts to. This is called the 341 Meeting of Creditors. Instead of meeting with a Judge, you and your creditors (creditors rarely attend) will meet with the court-appointed trustee to discuss your case. Unlike “traditional” hearings that you see on television shows, you will meet in an open room setting instead of a courtroom. For those filing in the Eastern District of California, your meeting will take place at an office within the Federal Courthouse. During Covid, this has been changed to allow for the hearings to be held telephonically.
WHAT IS THE PURPOSE OF THE 341 MEETING OF CREDITORS?
In any Chapter 7 or Chapter 13 case, a 341 Meeting of Creditors is mandatory. The purpose of this meeting is for the trustee to verify that the debtor is who they claim to be and get a sense of why they are seeking bankruptcy relief. While the name suggests that this is a meeting with your creditors, their attendance is actually optional. In fact, it is rare for them to actually attend. 341 refers to 11 U.S.C. § 341 of the bankruptcy code, which states that once a debtor has filed for bankruptcy, they are required to meet with their trustee at this hearing.
The 341 Meeting of Creditors serves as the trustee’s opportunity to see whether or not the debtor is committing bankruptcy fraud. If the trustee finds that you are committing bankruptcy fraud in some way, you may be subjected to paying a fine or even serving time in prison. One common example of bankruptcy fraud is hiding assets. Transferring assets to someone else so that they no longer are tied to your name is considered a form of hiding your assets from the Bankruptcy Court. This includes transferring the asset to a member of your family. If you are found to have done so, your case can be discharged and you will not be able to receive relief through a bankruptcy filing. If you are planning to file for bankruptcy, avoid making any large, unnecessary purchases. Buying luxury goods and filing for bankruptcy is known as presumptive fraud and can hinder your case.
WHEN WILL THE 341 MEETING OF CREDITORS OCCUR?
After you have filed for bankruptcy and your petition has been filed with the Court, you will be assigned a court-appointed trustee. The trustee will act in place of a judge and oversee your case throughout the process. The trustee will go through all of your paperwork and the Court will schedule the 341 Meeting of Creditors. Once scheduled, you will receive notice notifying you of the 341 Meeting of Creditors. Your creditors will also receive a notice. The notice will provide you with important information regarding when and where your 341 Meeting of Creditors will take place, in addition to how you can get in touch with trustee. It will also include a series of deadlines that both you and your creditors should be aware of. If any objections are looking to be filed by either party, double check with these deadlines to make sure that it is not too late.
PREPARING FOR THE 341 MEETING OF CREDITORS
When preparing for the 341 Meeting of Creditors, it is important to ensure that all of you paperwork has been accurately completed and is organized. It is also necessary for you to provide your attorney with a copy of all paperwork so that we can prepare and ensure that you have all necessary items completed. You will also be responsible with sending your trustee a copy of your paperwork at least 7 days before the meeting is scheduled. In addition to your bankruptcy filing, you will need to include the following unless they are not related to your situation:
- Most recent tax returns
- Recent bank statements
- Proof of income for the past 60 days
- Statements for any additional accounts, such as retirement or life insurance accounts
Trustee’s usually ask the same types of questions so your attorney will be able to prepare you beforehand with what you might be asked. Trustees are looking to find out more about your income and any assets that you own. If you are filing for a Chapter 7 bankruptcy, the trustee is looking to verify that the information provided is accurate. Additionally, they may ask questions in regard to your assets and determining what will be liquidated to pay for your debts. If you are filing for a Chapter 13 bankruptcy, the trustee will still be asking you questions as a way of verifying the information provided. Instead of receiving more information about your assets, the trustee is looking to determine whether or not your Chapter 13 repayment plan is realistic. Majority of your questions will focus on your source of income and how you typically spend your money. If you have demonstrated that you are able to do so, the trustee may adjust your plan to include larger payments.
If you have discovered any mistakes in your paperwork, can either file an amendment to fix the error prior the 341 Meeting of Creditors or mention it during the meeting.
ATTENDING THE 341 MEETING OF CREDITORS
The day has come, and it is time for you to attend your 341 Meeting of Creditors. You are required to attend the meeting and cannot miss it for any reason. Failure to attend may result in your case being dismissed and you will no longer receive relief through a bankruptcy filing. This will also dismiss the Automatic Stay and you will no longer be protected from any further action taken by creditors.
When attending the 341 Meeting of Creditors, DO NOT FORGET a photo identification, as well as your social security card. Additionally, bring your own copy of your paperwork with you and any new paperwork that has been filed after the initial filing. If you detected any mistakes in your paperwork or documentation, the 341 Meeting of Creditors is your opportunity to bring that up so having your own copy of your paperwork may help you refer to certain points you intend to bring up. Again, Covid has changed this procedure so you won’t technically take your identification and social security card to the hearing---rather, you’d provide a copy to your attorney prior to the hearing.
It is most likely that there will be a total of 3 people in attendance at your 341 Meeting of Creditors. You are required by 11 U.S.C. 343 to attend the meeting and answer any questions truthfully. It is also required for your bankruptcy attorney to be in attendance. Lastly, as previously mentioned, the court-appointed trustee will be in attendance and lead the 341 Meeting of Creditors. The trustee will oversee your case from your initial filing until your case has been concluded and you receive a discharge. During the 341 Meeting of Creditors, the trustee will review your paperwork and any additional documents that you have provided with the Court. The trustee will often ask questions to get more information or corroborate the information provided.
Although the trustee, your attorney, and yourself are the only ones required to be at your 341 Meeting of Creditors, you should be aware that other bankruptcy filers and their attorneys will also be in present in the room (or on the conference call). Trustees schedule 341 Meeting of Creditors to fit as many as they can within one hour. Often times, this means 10 hearings in one hour. You will wait amongst your fellow filers until your turn is called. During this time, you will have the opportunity to observe the hearings before you. This is beneficial because you will get an idea of how your 341 Meeting of Creditors will occur. Additionally, you will get a feel of the types of questions you may be asked.
Once it is your turn to meet with the trustee, you will present them with your photo I.D. and social security card. After your identity has been confirmed, the trustee will begin asking you any questions they deem necessary. Once the trustee has asked all of their questions, the creditors will have the opportunity to speak or ask questions, if they chose to attend. Creditors usually only attend the 341 Meeting of Creditors if they suspect that you did not provide the trustee with correct information. Creditors may ask about recent purchases and verify that the information provided in your paperwork is the same as the information you provided to them. 341 Meetings are designed to take around 10 minutes, so you can expect to not be fully examined by creditors like you would during a trial with a plaintiff and defendant.
The 341 Meeting of Creditors will be concluded once the trustee feels all necessary questions have been asked and the provided material is correct. If the 341 Meeting of Creditors is concluded, you will not have to attend any further meetings and can continue with your bankruptcy relief until you receive your discharge. If you are filing a Chapter 7, the trustee will begin the liquidation process. Your assets will be liquidated (if applicable) and the money earned will be used to pay your creditors for your outstanding debts. If you are filing a Chapter 13, you will proceed with your Chapter 13 Repayment Plan and make payments as scheduled. You will make payments directly to your trustee and they will be responsible for distributing the money to your creditors. If the trustee requests you provide them with more information, the 341 Meeting of Creditors will not be concluded, and another will be scheduled.
HOW CAN WE HELP?
If you are considering filing for bankruptcy, contact Sacramento Bankruptcy Lawyer today to begin developing your case. Attorney Pauldeep Bains will review your case with you and help prepare you for your bankruptcy filing, including the 341 Meeting of Creditors. Mr. Bains has years of experience attending these meetings and knows exactly what the trustee is looking to accomplish during this hearing. Mr. Bains will ensure that you are prepared and ease the bankruptcy process for you.
We help clients in the following areas: Sacramento, Elk Grove, South Sacramento, West Sacramento, Natomas, Citrus Heights, Antelope, Fair Oaks, Gold River, Rancho Cordova, Roseville, Rocklin, Lincoln, Wheatland, Yuba City, Marysville, Woodland, Davis, and Lodi.
