In every bankruptcy case – whether a Chapter 7 or a Chapter 13 – there is hearing conducted by the bankruptcy trustee called the 341 Meeting of the Creditors. This hearing allows the bankruptcy trustee and creditors to ask the debtor questions about their bankruptcy petition, schedules, income, assets and debts to ensure that no inadvertent or purposeful omissions have been made.
This hearing is normally conducted no earlier than 21 days but no more than 50 days after the filing of the debtor’s bankruptcy case. The hearing is not held in a court room, but instead, in a regular meeting room. Unlike regular court hearings, a 341 hearing is not presided by a judge.
About a week prior to hearing, the debtor must make available to the trustee certain documentation. This documentation often includes but is not limited to:
Copies of the last 6 months of the debtor’s paystubs or other sources of income;
Last 2 years of tax returns;
Copies of titles and/or vehicle registrations;
Copies of dissolution of marriage orders;
Copies of bank statements for the 12-month period prior to the filing of the bankruptcy petition;
Copies of property deeds; &
Copies of child support orders.
Failure by a debtor to provide the bankruptcy trustee with the requested documentation can result in the rescheduling of the hearing or even a motion to dismiss the debtor’s case.
Every trustee is required to check proof of identity from every debtor they will examine. To that end, a debtor must bring a photo ID and proof of Social Security number to the hearing for the trustee to examine. The trustee cannot conduct the hearing if the debtor does not bring the required proof of ID and Social Security documentation.
Once the debtor’s ID and Social Security number has been verified, the trustee will commence the debtor’s examination. Normally, questions asked include but are not limited to:
The circumstances that led the debtor to file for bankruptcy;
Whether the debtor reviewed the bankruptcy petition before filing and whether the information contained therein is true, correct, and accurate;
Whether any creditors have been repaid in the 90 days prior to filing;
Whether anyone owes money to the debtor;
Whether the debtor has repaid any family or friends in the year prior to filing;
Whether the debtor has sold or transferred any property in the 2 years prior to filing;
Whether the debtor is married and has any dependents;
Whether the debtor’s expenses are necessary and reasonable;
The stability of the debtor’s income; &
The value of the debtor’s property.
In most cases, no creditors actually appear at this hearing. That said, creditors are entitled to appear at the hearing and examine the debtor. If a creditor has used his credit cards for purchases that can be deemed to be for luxury items, one can expect to see an attorney for a credit company.
Bottom line: If a debtor has been thorough prior to the filing of their bankruptcy case and provided the bankruptcy trustee with all required documentation prior to the hearing, the 341 Meeting of the Creditors normally turns out to be a short and uneventful affair.