Ten Things To Know About the Meeting of Creditors
There are ten things to know about the meeting of creditors. Why? Because the Bankruptcy Code requires your Trustee to convene and preside at a meeting of creditors in every bankruptcy case. So, whether your case is under Chapter 7, Chapter 11 or Chapter 13, you’ll need to be prepared. The meeting of creditors also known as a “341 meeting,” which is a reference to the section of the Bankruptcy Code which requires the meeting to be held.
As with all matters affecting a bankruptcy case, the meeting of creditors is important, and should be approached with care.
Here are the top ten things to know about the meeting of creditors:
1. You Need To Review Your Bankruptcy Schedules
The Trustee seldom knows anything about your bankruptcy case, except the information that is contained in your bankruptcy schedules. You need to be familiar with the assets and debts that are listed on your bankruptcy schedules. Since it’s probably been several weeks since you provided that information, you should review the schedule, and be ready to explain how you reached the values that listed for your home, your vehicles, and your other property.
2. You Must Attend Your Meeting
The meeting of creditors is the only scheduled appearance that you’ll need to make after filing bankruptcy. You must attend your meeting, and you’ll need to appear with your spouse if your bankruptcy is a joint case. There will be several weeks of advance notice, so you’ll have time to make arrangements to attend. Allow a little extra time to pass through security at the building entrance, and try to be a few minutes early.
3. You’ll Be Treated With Respect
The time set for the meeting of creditors will be used for a number of separate meetings. Cases are called one by one, and it is not unusual for ten or twelve meetings to be scheduled for the same time. The meeting of creditors is a public meeting, with twenty-five or thirty people in attendance. Everyone is there for the same reason, and the meetings are conducted with respect and courtesy. When your case is called, we’ll sit with you at the meeting table with the bankruptcy trustee.
4. You’ll Need To Provide Identification
The bankruptcy system is built on trust, but it is also built on verification. Every bankruptcy attorney and trustee has a story about mistaken identity, and the confusion that follows. The Trustee is required to verify your identity, so bring photo identification. You’ll also need to show a document listing your social security number. A social security card or a pay stub is all you need.
5. You’re Unlikely See Any Of Your Creditors
Although all parties listed on the bankruptcy schedules will receive notice of the meeting, it is unlikely that any of your creditors will attend. If any do attend, it is usually out of curiosity. Secured creditors may appear to ask whether their debt will be reaffirmed, or ask about the location and condition of their collateral. The Trustee will moderate any questions from creditors, and we will help you provide answers if necessary.
6. You’ll Definitely Not Meet With A Judge
The bankruptcy law prohibits the bankruptcy judge from attending the meeting of creditors. Although the meeting of creditors is serious business, it is not a hearing. No legally binding decisions can be made for you, or against you. Nevertheless, the meetings are recorded, so be careful and thoughtful with your answers.
7. You’ll Meet With Your Trustee
The Trustee will always preside over the meeting of creditors. The Trustee will have reviewed your bankruptcy schedules prior to the meeting. The Trustee’s job is to identify any assets that might be beyond your ability to protect, and identify any transfers of property that the trustee might be able to recover.
Very few bankruptcy cases involve assets that are not protected, or transfers that can be avoided. Trustees quickly learn how to close the cases that do not involve any assets that can be recovered for creditors. Be ready to answer any questions that arise about assets or transfers, so the Trustee can conclude the meeting without waiting for further information.
8. You’ll Tell The Truth
Be prepared to raise your right hand, be placed under oath, and to truthfully answer all questions. The meetings are recorded, and your answers are sworn testimony. Be careful and thoughtful with your answers. Don’t guess as to facts you don’t know. If you don’t know the answer to a question, say you don’t know. The only wrong answer to a question is an untruthful answer, or an answer based on speculation.
9. You’ll Need To Be Prepared For Some Questions
The Trustee will review your bankruptcy schedules prior to the meeting to identify any particular issues or specific questions that need to be asked. These questions are usually intended to determine whether you might have any property that could be claimed by the trustee.
Other question are asked to determine whether there were payments to creditors or transfers of property made before the bankruptcy filing that might be recovered by the trustee. For example, if you own a home, the Trustee will ask you how you valued that home, and if it’s been appraised recently. You can expect the Trustee to always ask the following questions:
- Did you review your bankruptcy schedules prior to signing?
- Are your bankruptcy schedules true and accurate?
- Do you have any changes or modifications to your schedules you wish to make?
- Did you list all of your assets?
- Did you fairly value those assets?
- Have you lived in this state for the last 2 years?
- Do you expect to receive an inheritance in the next 6 months?
- Did you sell any real property in the last 4 years?
- Did you transfer any property to anyone in the last 2 years?
- Did you repay a loan from a friend or relative in the last year?
- Do you have any claims against a third party, such as an automobile accident claim?
- Do you owe any one or any agency maintenance or support payments?
- Did you read the bankruptcy information sheet put out by the U.S. Trustee?
10. You’ll Need The Meeting To Be Concluded.
The Trustee will conclude the meeting of creditors when all questions have been asked and answered, which often takes less than five minutes. In the vast majority of bankruptcy cases, there are no Court hearings with a judge, and the meeting of creditors is the only face-to-face involvement with the Trustee or the court system.
The conclusion of the meeting of creditors starts a thirty-day deadline by which any objections to your exemptions must be filed. If no objections are filed, your exemptions are allowed, and the property that you claimed exempt is no longer part of your bankruptcy estate.
The exempt property is yours again, free and clear of any claims of the trustee, or your general creditors. If any objections to your exemptions are filed, we will attempt to resolve them, or bring the objection to the Court for determination.
For most of our clients, the conclusion of the meeting of creditors is a relief, even though they are well prepared. It is also the time when their freedom from debt feels very real. Be prepared for your meeting of creditors, and be ready to feel that same relief!