After I file bankruptcy, I have to attend a “meeting of creditors” or a “341 hearing.” What is a “341 hearing” or a “meeting of creditors”?
A meeting of creditors, often called a “341 hearing” or a “creditor’s meeting,” is a mandatory hearing that occurs after a debtor has filed their bankruptcy petition. It is required for both Chapter 7 bankruptcies and Ch 13 bankruptcies. Unfortunately, many debtors do not know what to expect at a 341 hearing. Because they do not know what to expect, they often worry about attending the hearing, and they approach the event with unnecessary anxiety and nervousness. There is absolutely no need to worry about attending a 341 hearing. For our clients, we make every attempt to ensure that they are well prepared for the hearing. Through proper preparation, we aim to remove the fear of the unknown. The meeting of creditors is required by the bankruptcy code for both Chapter 7 and Chapter 13 debtors. This requirement is set forth in section 341 of the bankruptcy code (11 U.S.C. §341). Thus, not surprisingly, it is often referred to as a “341 hearing.” The 341 hearing is not held in front of a judge. It is conducted by the bankruptcy trustee; that is, the attorney appointed as trustee of the debtor’s bankruptcy. It is not held in a courtroom, although it may be held in a meeting room inside a federal building. The debtor is required to bring a photo I.D. and proof of the debtor’s social security number (e.g., a social security card). The trustee will verify this information prior to the debtor’s hearing. Usually, the longest part of a 341 hearing is waiting on the case to be called. But waiting is often beneficial for the debtor. During the wait, the debtor will be able to observe the other cases. Most people find it very helpful to watch two or three other cases to “see how it’s done.” For this reason, we often recommend that our clients arrive at the hearing slightly earlier than necessary so they can observe other cases. Once the debtor’s case is called, the debtor and their attorney will sit down with the trustee at a table. The debtor will be put under oath, or “sworn in.” Then, the trustee will proceed with his questions. The 341 hearing is an opportunity for the bankruptcy trustee to ask questions to the debtor. Prior to the hearing, the debtor’s attorney should have provided several documents to the trustee’s office. The trustee will have already received and reviewed the debtors’ bankruptcy petition along with the additional documents that were provided. For the most part, the trustee will ask questions to verify the information contained in the debtor’s filings. For example, the trustee may ask if the debtor has changed jobs since they filed their bankruptcy. Or the trustee may ask if the debtor is living at the same address as when they filed their bankruptcy. For a Chapter 13 debtor, the trustee will ask the debtor if they have made their first plan payment. For a Chapter 7 debtor, the trustee may ask about the condition of certain pieces of property. The trustee may request the debtor to verify that they have filed all required tax returns. These are only a few of the very routine questions that may be asked. Sometimes the trustee will ask for clarifications on the details of the debtor’s filing. After all, bankruptcy cases are filled with a multitude of details, and that often results in cases that are very complex. Even with the most thorough filing, it may be necessary for the trustee to ask for some simple explanations. Paperwork, alone, does not always tell the complete story. [A quick side note: The trustee will not ask the debtor to justify why they filed a bankruptcy petition. Nor will the trustee attempt to embarrass the debtor because they have filed a bankruptcy petition.] The trustee will also use the 341 hearing as an opportunity to speak with the debtor’s attorney about any issues that need to be addressed. It is very common for the trustee to request that the attorney amend part of the filing or that the debtor provide additional documents. After the trustee is finished with his questions, he will ask if there are any creditors that wish to be heard. In practice, it is exceedingly rare that a creditor will attend a 341 hearing. If they do attend, they will be given an opportunity to ask questions. At the conclusion of the hearing, the trustee and the attorney will review any items that need to be addressed, and the debtor will be dismissed. The entire process usually takes less than 5 – 10 minutes (after the case is called). In our office, we ask our clients to schedule an appointment to meet with the attorney before the meeting of creditors to review and prepare for the hearing. We review the details of the client’s case. We answer any of the client’s questions about the hearing. We also use the appointment as an opportunity to verify the status of the client’s case since the date of filing. We make sure the client knows where the hearing is located, including driving and parking directions. Lastly, we set a time and location to meet the client at the location of the 341 hearing. At the end of this appointment, the client knows what to expect from the 341 hearing, and they know exactly where to go, what time to be there, and a familiar face to look for.