Bankruptcy Basics – Meeting of the Creditors

The creditors’ meeting, otherwise known as 341 meeting, is a procedural step in every Chapter 7 and Chapter 13 bankruptcy.  In a typical 341 meeting, the debtor will be asked questions under oath by the bankruptcy trustee with respect to his or her financial affairs.  Most debtors are apprehensive of the 341 meeting.  While 341 meeting is also designated as the first meeting of the creditors, creditors seldom come to the first meeting, and there isn’t usually a second meeting.  Most of the time, it is a meeting of the debtor and the trustee appointed in the case.

There are two items that the debtor must have at the 341 creditor’s meeting.  The first one is a state issued photo identification card.  For most people, this is going to be their driver’s license.  The second item is the social security card.  If the debtor does not have these documents at the meeting, the trustee cannot go forward with the creditors’ meeting since the trustee must confirm the debtor’s identity.  Occasionally, trustee may permit the use of a W2 forms, annual social security statements, or a payroll check stub that contains debtor’s social security number.

Take the time to locate these documents before you arrive at the location for your creditor’s meeting.  Here in Rochester, bankruptcy trustees usually tell the debtors to have their identification and proof of social security number ready at the beginning of the meeting.  Most bankruptcy attorneys will ask the clients for those documents so they can be handed t the trustee.  I often have seen people anxiously looking through a purse or wallet for a social security card that they just know they have, only to find out that they don’t have it, or that they are too nervous to find.

The 341 meeting is not a test or a trial.  The trustee won’t be asking any trick questions.  Your lawyer is there for support and to make sure that the record created is truthful and accurate.  In order to have a successful 341 meeting all the debtor has to do is to follow these four steps:  (1) tell the truth; (2) listen to the question; (3) let the trustee finish before you start speaking; and (4) answer in as few words as possible.

It is critical for someone who filed bankruptcy to be honest during 341 hearing.  It is just as critical for the debtor to be honest with his/her attorney prior to the hearing, before the petition is prepared out and filed.  If the debtor’s statements during the 341 hearing contradict the petition, and those contradictions were deliberate on the part of the debtor, that means the debtor may have already committed perjury, which is a federal offense.  When the petition is filed, the debtor, by signing his or her petition, swore that the petition was truthful.

There are a number of questions that a trustee is required to ask the debtor at the meeting of creditors.  They are as follows:

1.   State your name and current address for the record.

2.   Please provide your picture ID and Social Security number card for review.

3.   Did you sign the petition, schedules, statements, and related documents and is the signature your own? Did you read the petition, schedules, statements, and related documents before you signed them?

4.   Are you personally familiar with the information contained in the petition, schedules, statements and related documents? To the best of your knowledge, is the information contained in the petition, schedules, statements, and related documents true and correct? Are there any errors or omissions to bring to my attention at this time?

5.   Are all of your assets identified on the schedules? Have you listed all of your creditors on the schedules?

6.   Have you previously filed bankruptcy? (provide trustee with case number and the discharge information to determine discharge eligibility in this case)

7.   What is the address of your current employer?

8.   Is the copy of the tax return you provided a true copy of the most recent tax return you filed?

9.   Do you have a domestic support obligation? To whom? Please provide the claimant’s address and telephone number, but do not state it on the record. Are you current on your post-petition domestic support obligations?

10.   Have you filed all required tax returns for the past four years?

There are also other questions that a trustee may ask you:

1.   Do you own or have any interest whatsoever in any real estate? If owned: When did you purchase the property? How much did the property cost?  What are the mortgages encumbering it?  How did you arrive at the value of the property?

2.   Have you made any transfers of any property or given any property away within the last one year period?

3.   Does anyone hold property belonging to you? If yes: Who holds the property and what is it? What is its value?

4.   Do you have a claim against anyone or any business? If there are large medical debts, are the medical bills from injury? Are you the plaintiff in any lawsuit? What is the status of each case and who is representing you?

5.   Are you entitled to life insurance proceeds or an inheritance as a result of someone’s death?  If you become a beneficiary of any one’s estate within six months of the date your bankruptcy petition was filed, the trustee must be advised within ten days through your counsel of the nature and extent of the property you will receive.

6.   Does anyone owe you money?  Who owes the money and where are they?

7.   Have you made any large payments, over $600, to anyone in the past year?

8.   Were federal income tax returns filed on a timely basis? When was the last return filed? Do you have copies of the federal income tax returns?  At the time of the filing of your petition, were you entitled to a tax refund from the federal or state government ?

9.   Do you have a bank account, either checking or savings? If yes: In what banks and what were the balances as of the date you filed your petition?

10.   When you filed your petition, did you have:

a. any cash on hand?
b. any U.S. savings bonds?
c. any other stocks or bonds?
d. any certificates of deposit?
e. a safe deposit box in your name or in anyone else’s name?

11.   Do you own an automobile? If yes: What is the year, make, and value? Do you owe any money on it? Is it insured?

12.   Are you the owner of any cash value life insurance policies? If yes: State the name of the company, face amount of the policy, cash surrender value, if any, and the beneficiaries.

13.   Do you anticipate that you might realize any property, cash or otherwise, as a result of a divorce or separation proceeding?

14.   Have you been engaged in any business during the last six years? If yes: Where and when? What happened to the assets of the business?

As log as you and your bankruptcy lawyer are prepared, your 341 hearing is likely to be completed quickly.  If you are missing documents or if trustee requires additional information, your hearing may be rescheduled to a later date.

If you are dealing with debt problems in Rochester, New York, Canandaigua, Brighton, Pittsford, Penfield, Perinton, Fairport, Webster, Victor, Farmington, Greece, Gates, Hilton, Parma, Brockport, Spencerport, LeRoy, Chili, Churchville, Monroe County, Ontario County, Wayne County, Orleans County, Livingston County, and being harassed by bill collectors, and would like to know more about how bankruptcy may be able to help you, contact me today by phone or email to schedule a FREE initial consultation.