341 Meeting of Creditors During Bankruptcy – What to Expect
Once your bankruptcy petition has been filed through the Electronic Court Filing (ECF) system used by the federal courts, you will be given a docket number and a set of dates for your bankruptcy proceeding. One of these will be the “341 Meeting,” a meeting the debtor is required to attend, run by the bankruptcy trustee.
Creditors may attend the bankruptcy 341 Meeting, but are not required to. In this article, we will tell you what to expect at a typical 341 Meeting.
What Is a 341 Meeting in Bankruptcy Cases?
A 341 Meeting is a meeting to which the bankruptcy filer and all creditors are invited by the bankruptcy court. It is called a “341 Meeting” due to being a statutory requirement of Section 341 of the Bankruptcy Code. In Chapter 7 (“liquidation”) and Chapter 13 (“reorganization”) bankruptcies, the 341 Meeting is conducted by the bankruptcy trustee, a court-appointed neutral official who reviews the bankruptcy petition and steers the process.
At the 341 Meeting, the debtor is required to answer questions about their petition and attached schedules – or form financial disclosures – under penalty of perjury. If the debtor has a joint filer such as a spouse who is also listed on the filing, the joint filer must also attend the 341 Meeting. Questions will generally pertain to the debtor’s conduct, property, financial assets and liabilities, earning status and potential, and other matters pertaining to the administration of the bankruptcy case.
Creditors are permitted to attend the meeting and voice any challenges they have to the petition. In fact, the 341 Meeting is even sometimes called a “341 meeting of creditors” or “bankruptcy meeting of creditors” for this reason. However, creditors rarely attend 341 Meetings, and have an opportunity to also follow up by filing any challenges under the case docket and within a certain timeframe, in the event they do not attend.
341 Meetings occur somewhat rapidly, and many in succession once the doors of the bankruptcy court or bankruptcy meeting room are opened. It therefore helps for a debtor to have an attorney familiar with the proceeding accompany the debtor, and for both debtor and attorney to review the filed paperwork beforehand for the sake of efficiency. Sometimes up to a dozen 341 Meetings may take place in a single hour!
341 Meeting – Not 341 Hearing
Importantly, and to give some peace of mind to debtors, bankruptcy law prohibits a bankruptcy judge from attending the 341 Meeting. In other words, the 341 Meeting is not a court hearing, and no binding decisions are going to be made there with the force of law. There will probably not be any attorneys in the room who have adverse interests to the debtor (except the occasional creditor’s attorney, which as we noted is rare).
Even though there is no 341 bankruptcy hearing, 341 Meetings are recorded and do become part of the bankruptcy record, with questions asked by the trustee are under oath and penalty of perjury. Therefore, you must know the facts of your case going in and give correct answers during the meeting.
What to Bring to a 341 Meeting
A major administrative component of the 341 Meeting is confirmation of your identity. Therefore, bring with you to the meeting your photo identification, a document showing your social security number such as a social security card, and a pay stub and/or most recent tax return.
We also advise bringing a copy of your filed bankruptcy petition and schedules, to follow along or refer to the documents in the event any questions are asked pertaining to them.
What to Wear to a 341 Meeting of Creditors
Prevailing wisdom regarding how to present oneself at a bankruptcy hearing may follow the jarring scene from a television show, where a debtor wears a lavish ring to a hearing which the trustee asks about and then takes away. Although this is high drama and not always real life, it is best to not dress lavishly or fancily for a 341 Meeting.
Avoid expensive jewelry or accessories, many of which will qualify for exceptions under Texas bankruptcy law in various appropriate schedules. Avoid obvious designer clothing and shoes.
Being the best-dressed person in the room at your bankruptcy hearing could convey the wrong message as to your means, which could raise concerns about the truthfulness of your petition and schedules. Dress conservatively and professionally when attending the meeting, and if you need further clarification, do not hesitate to ask your attorney – remember that attorneys attend these hearings all the time!
What Happens at a Bankruptcy Meeting of Creditors?
The 341 Meeting is held in a courtroom or meeting room, and administrated by the bankruptcy trustee, outside of the hearing of a judge. What happens in a 341 Meeting begins with your arrival at the federal courthouse or other designated building. Once you arrive, you will check a list for your case caption and/or name. The trustee will call between 10-12 cases within the hour, including yours, from the list. You and your attorney will greet the trustee, sit with the trustee and their assistants, if any, and provide documents to verify your identity.
Next, the trustee will ask questions for about 15 minutes to confirm the veracity of the documents you filed with the court – such as your petition and schedules. The trustee will try to see if you have assets that should not be protected by the exemptions available in the State of Texas, and to parse any other potential challenges to granting you your bankruptcy. This will be done through a series of questions asked by the trustee and answered by you under oath.
What Questions Can a Trustee Ask in a 341 Meeting?
The questions asked by the trustee are mostly standard for all debtors. The trustee is required to ask at a minimum the following questions:
- Did you review your bankruptcy schedules prior to signing?
- Are your bankruptcy schedules true and accurate?
- Do you have any changes to your schedules?
- Did you list all your assets?
- Did you list all your debts?
The trustee may also ask discretionary questions related to the value of your home, your car, whether you have legal claims outstanding against any individuals or businesses, whether you are anticipating an inheritance, and if you have transferred or gifted any assets recently. The trustee may ask if you have alimony or child support payments due and owing. The trustee may ask if you have properly and completely filed your state and federal tax returns each year.
These questions are not intended to trip you up or trick you, but it is essential that the answers you provide are truthful and match what your filed pleadings say.
What Happens after a 341 Meeting?
After all questions have been asked and answered to the satisfaction of the trustee, the trustee will adjourn the 341 Meeting of creditors. For most bankruptcy filers, this is the only in-person appearance they are required to make. There are generally no court hearings before a judge, and the bankruptcy proceeding will automatically move on to a discharge of debts (Chapter 7) or the finalization and implementation of a repayment plan (Chapter 13) within a few months.
Although the time leading up to the 341 Meeting may be stressful, the conclusion of the meeting of creditors is the time when debtors feel they have ‘turned the corner’ and begin to breathe sighs of relief.
How Long after a 341 Meeting until Discharge?
Provided that the trustee is satisfied at the 341 Meeting, the documents and pleadings are verified, and no creditors raise follow-up challenges, discharge of debts generally occurs between three to six months after the 341 Meeting, if not sooner. This varies from case to case.
Let the Law Offices of Seth Kretzer Guide You through the Bankruptcy Process
When preparing for and attending a 341 Meeting during your bankruptcy, you will need a lawyer with specific experience on bankruptcy in Texas and who has the right knowledge and resources to help you. The Houston bankruptcy lawyers at the Law Offices of Seth Kretzer can help.
Contact us online today to schedule a free consultation and discuss your concerns.