What is a meeting of creditors

In all bankruptcy cases filed, a debtor is required to submit themselves to examination at what is commonly called a 341 hearing, or a meeting of creditors. The name comes from the federal code section at 11 USC 341 which requires examination of a debtor by a court appointed trustee of the debtors schedules and financial affairs filed with their bankruptcy petition.
For most consumer debtors filing Chapter 7 or Chapter 13, the hearings typically run every day at the federal building or office of the United States Trustee. In Norfolk, they are at the Federal Building. In Newport News they are at a small office building. In Richmond, they are in the Federal Courthouse.   The hearing is typically conducted by someone called a trustee. A trustee is a appointed individual by the court whose job is to review your bankruptcy to determine a variety of things. The hearing generally takes place within the first month of filing a case.   First, are you telling the truth in your schedules? When you file bankruptcy you are required to turn over a lot of financial records. It is the trustees job to review those records to make sure your financial schedules are supported by a historical and verifiable record of documents produced over the past years.   Second, are your schedules prepared accurately? Most people are represented by attorneys, and it amazes me how many mistakes are still made on petitions. Probably 60% of the time, a trustee is directing the debtors attorney to make corrections. Sometimes it is sloppy lawyering, sometimes the debtor did not provide a clear picture to their counsel, sometimes there has been a legitimate change since the case was filed. As a debtor, you are responsible for the accuracy of your bankruptcy papers and to make updates as changes occur. You are signing the papers under the penalties of perjury, so make sure they are right, and make sure you update your attorney to make changes when things occur while the case is ongoing. Third, and probably most importantly, the trustee is trying to find ways to increase payments to unsecured creditors. Either by liquidating non-exempt assets in Chapter 7 or seeking a higher repayment amount in Chapter 13. Either way, they have a fiduciary responsibility to maximize the payment to unsecured creditors from either your future income or your current assets. Its very important to make sure you understand that the trustee is a legal adversary to you. While a Chapter 13 trustee has some dual roles to protect the process, at the end of the day, both Chapter 13 and Chapter 7 trustees are primarily representing the creditors you are trying to get discharged. Accordingly, be careful about communicating with them any more than is absolutely necessary. If you have an attorney, you should always communicate with a trustee via your attorney. This shields you from any harm that could come your way by directly communicating with them. Finally, the fourth and often least important part of the meeting, is the opporunity for creditors to appear to ask you questions under oath. In 15 years of practicing law, maybe 1 out of 100 cases involves a creditor showing up and asking questions. And usually when they do, it is a ex-spouse or neighbor that is getting their debts wiped out in bankruptcy and shows up to raise whatever chaos they possibly can raise. While creditors are invited to come, most of the time they do not. Filing bankruptcy is a very serious legal proceeding. If you are contemplating filing bankruptcy you should strongly consider using a skilled bankruptcy attorney to assist you through the process. It is literally a minefield of legal issues that could result in you losing assets, losing income or possibly even facing criminal charges for bankruptcy crimes if your schedules are not prepared correctly and you testify truthfully and honestly at a meeting of creditors. Most bankruptcy attorney will charge you $1000 or less in upfront fees to handle a bankruptcy case. While coming up with any money in the face of bankruptcy may be difficult, the failure to be properly represented could be even worse.  For a perfect nightmare story about representing yourself, read this article that I wrote in November 2013. http://www.virginialawoffice.com/blog/bid/352048/Do-I-need-an-attorney-to-file-bankruptcy   Feel free to contact me to discuss helping you file bankruptcy. I have been a bankruptcy attorney for 15 years and can make sure you are guided properly through the bankruptcy process.

Tim Anderson Attorney At Law 757-301-3636