27 Sep What you need to know about Sec. 341 Meeting of Creditors
By Atty. Crispin Caday Lozano
Q What is Sec. 341 meeting of creditors?
A. Every debtor, regardless of the chapter, must make one appearance in the case, though it is not really in “court” since the judge is not present. The court schedules a meeting of creditors in each case, usually about 30 days after the filing. The meeting is called the “§341 meeting” after the section of the bankruptcy code that requires it.
Q. Who presides at the meeting of creditors?
A. The trustee assigned to the case presides and asks questions about the contents of the bankruptcy schedules. The debtor must appear at the meeting and answer questions under oath about his assets and liabilities. In cases where there are assets with value in excess of the available exemptions, the trustee tries to gather information to aid in his liquidation of those assets for payment to creditors. He may ask for the business records (if any) or other documents concerning the assets or the debtor’s financial history.
Q. What happens in a Sec. 341 meeting?
A. The §341 meeting is not a test or an inquisition. Neither the trustee nor the creditors can take any action at the meeting that decides any question central to the case. It is a fact finding meeting. Of course, if new or troubling facts come out at the meeting, the trustee or a creditor can file a motion or an adversary proceeding in the bankruptcy court for the judge’s consideration. The trustee swears you in and begins his questioning. The meeting is either tape recorded or recorded by a court reporter.
The trustee may also ask how you reached the values on your assets and for more information about unusual assets or business interests. If the trustee needs more information or documents that aren’t available at the meeting, the meeting may be continued until another date when the information can be provided and any questions answered.
Q. How should you prepare for the meeting of creditors?
A. Your attorney will prepare you for the meeting of creditors. The common questions that the Trustee will ask the debtor are (a) if debtor filed bankruptcy before, (b) if debtor has other income and properties not included in the schedules submitted, (c) if debtor included all his or her debts in the schedules (d) if debtor has made preferential payments to creditors and friend or relatives. In addition, the debtor should bring government issued identification such as state identification card or driver’s license or passport and original the Social Security Card. Failure to bring any one of these will cause the hearing to be continued for the next available date. The meeting will also be continued if the debtor failed to submit any document that the Trustee requested.
Note: This is not a legal advice. You should seek the advice of your attorney about your specific case.
- Debt settlement or debt consolidation are expensive and not a guaranteed way to reduce your debt because some creditors will sue you. It will take three years to complete and your credit will become worst during that period. In bankruptcy the debts are discharged within three months.
- Bankruptcy will actually improve your credit within one year because your unsecured debts are discharged. Although the bankruptcy will be in your records for 10 years, not filing bankruptcy will make your credit even worse until most your debts are paid.
- If you are being sued by your creditors, most money judgment can be eliminated in bankruptcy.
- Collection actions continue and you can be sued if you are in debt settlement.
- Chapter 7 will eliminate all unsecured debts. If you are near retirement age, you must eliminate most of your debts.
- Bankruptcy will stop foreclosure actions. If your trustee sale date is 10 days before, you can still file for bankruptcy.
- If your salary is being garnished, you have a court case about debts or you are being harassed by creditors, bankruptcy can stop garnishment, court cases, harassing creditors and eliminate the debt.
- Bankruptcy is cheaper, faster and safer than debt settlement which has no guaranteed success.
- Preserve your health, eliminate stress and live a happy life by eliminating your debts which is the root of all problems.