A 341 Meeting of Creditors in Chapter 7 Bankruptcy is a meeting between the Chapter 7 trustee ( an appointed lawyer), the debtor ( person filing bankruptcy), creditors, and in some cases, an attorney from the U.S. Trustee's Office. An attorney for the debtor should also attend the meeting. If the debtor fails to attend the 341 Meeting the Chapter 7 trustee has authority to move to dismiss the case.
The 341 Meeting is held approximately 45 days from the day that the Chapter 7 bankruptcy petition is filed. The debtor must bring a signed copy of the debtors' Chapter 7 petition and schedules, a copy of the most recently filed federal income tax return, and copies of pays stubs for the period 60 days before the bankruptcy filing. If paystubs are not available or the debtor does not have paystubs because of self employment, the debtor must provide an affidavit to explain the circumstances. If the debtor is not required to file a tax return, the debtor must also provide an affidavit explaining the circumstances. The debtor must also bring his or her social security card and a driver license or non-driver identification ( from department of motor vehicles) showing the debtor's current address.
The meeting has several purposes. One purpose of the meeting is to examine ( question) the debtor under oath about the statements contained in the debtor's bankruptcy petition and schedules to determine if the debtor is credible. It is important that the debtor be truthful. Untruth testimony could lead to an objection to the debtor's discharge and a criminal investigation by the FBI. The 341 meeting examination is also used to determine if the debtor has non-exempt assets available for the Chapter 7 trustee to sell and pay creditor claims against the bankruptcy estate. The bankruptcy estate is the debtor's non-exempt assets ( Assets the debtor can not keep upon filing bankruptcy which the trustee takes control of). Lastly, a 341 meeting examination may be used as a discovery tool to determine if the debtor's debts are dischargeable under the law. For example, a debt may not be dischargeable because the debtor committed bankruptcy fraud, because the debtor committed a crime or a certain type of civil tort, or because the debt is one of a category of debts that are not dischargeable such as certain types student loans and certain types of taxes. A Chapter 7 Bankruptcy attorney should be contacted to determine what type of debts are dischargeable since the dischargeability of debts is a complex area of the law.
The debtor will be asked questions about his or her assets, liabilities, financial affairs, bank accounts, and transfer of assets. Questions are also asked more specifically about intangible assets such as personal injury claims, pending or potential lawsuits, and potential inheritance.
Most Chapter 7 cases are no-asset cases. The debtor has no assets that the Chapter 7 trustee can take control of, sell, and pay creditor claims. In those type of cases, creditor attorneys are not likely to attend the meeting since there is nothing for the creditor to make a claim against. The Chapter 7 trustee is then the only person who questions the debtor.
The 341 Meeting of Creditors for most debtors takes approximately 5 to 10 minutes to conduct. Waiting time in the meeting rooms varies from 30 minutes up to 2 hours depending on how many cases there are before your case is called.
It is very important that the debtor's attorney properly prepare the debtor before the debtor gives sworn testimony about his or her petition and schedules so that there are no surprises during the meeting and so that the debtor can clear up any mistakes that were in his or her papers. Preparation for the 341 meeting also helps to put the debtor at ease since he or she will know what questions he or she can expect from the Chapter 7 trustee and creditor attorneys. Preparation means going over all the information contained in the petition and schedules with the debtor and providing the debtor with questions that the Chapter 7 trustee is likely to ask.
Since the debtor's credibility will be determined in part by his or her demeanor, it is important that the debtor dress conservatively. It is recommended that the debtor dress casual but neat or in business attire. The debtor should not wear overly casual clothing such as shorts, T-shirts, or ripped jeans since the appearance before the Chapter 7 trustee should be respectful. Although the trustee is not a judge, the Chapter 7 trustee has power to move dismiss your case, and to move for an order avoiding a transfer ( sale or gift) of property made to third parties ( or creditors) before the filing of the bankruptcy petition.
If the Chapter 7 trustee is satisfied with the debtor's testimony, he will close the meeting. Otherwise, he may adjourn the meeting so the debtor can come back and provide additional documentation (such as bank statements, deeds, contracts, divorce agreements) and testimony at a later date. Creditors have 60 days from the 341 meeting to file complaints objecting to the discharge of the debtor generally and/or to the dischargeability of a particular debt.