The process of filing for bankruptcy, whether it be Chapter 7 or Chapter 13, can be intimidating and confusing. Many different terms and phrases are thrown at the debtor, and it is not always clear what those terms mean.
A 341 Meeting of Creditors is one of those phrases.
What does this meeting entail, and how can a debtor prepare?
A 341 meeting of creditors is a hearing where the debtor is sworn under oath and is asked a series of questions by the bankruptcy trustee about his or her assets and liabilities.
The reason it is given the name “341 hearing” is it falls under Section 341 of the Bankruptcy Code.
The hearing will normally take place in the courthouse for the debtor’s given district, but it will not be a normal hearing in that the debtor will not be going before an actual judge. The questions will be given by the trustee instead, so the process is more informal than a full-blown hearing.
However, it is extremely important that the debtor take this process seriously as it is an important part of the bankruptcy trustee getting a clear idea of what is at stake.
Regardless of whether the debtor is doing a Chapter 7 bankruptcy or Chapter 13 bankruptcy, he or she will face a 341 hearing.
At the start of the 341 hearing, the debtor will be sworn in.
The situation begins much like a deposition, but it does not follow the typical rules of court. No court reporter will be present, and creditors are welcome to ask questions informally of the debtor. The trustee will likely record the interview for later use. The entire procedure normally lasts no more than five to ten minutes once started, so long as the debtor is cooperative.
The debtor will be asked questions about what assets he or she owns and will be asked to discuss what financial circumstances led to him or her filing for bankruptcy. It sounds easy, and in theory, the process is relatively easy.
However, for the debtors facing bankruptcy, this is an emotional process and can be stressful as the decision to file for bankruptcy is never an easy one.
If the debtor has an attorney, he or she is welcome to attend as well. In fact, it is often recommended that an attorney be retained and attend this important meeting.
It helps to know what to expect before going to the 341 meeting. The debtor should expect to answer some basic questions about his or her name and current address. The trustee will also want to see a picture ID and Social Security card for review.
The debtor will then be asked the following:
So long as the debtor answers these questions truthfully, he or she will not have anything to be concerned about.
The main point of these questions is to get an accurate picture of the bankruptcy estate and to ensure that the debtor is not trying to conceal any assets from the bankruptcy filing process.
All of this will be included in the petition and the bankruptcy attorney will be able to walk through the process with the client prior to the 341 meeting of creditors.
Creditors will have a chance to attend and ask questions, although not many creditors attend.