What Happens at a Chapter 7 Bankruptcy Meeting of Creditors?

Everyone who files for Chapter 7 bankruptcy, individuals and businesses alike, must attend a hearing called the 341 meeting of creditors. At the hearing, the Chapter 7 bankruptcy trustee, the person responsible for overseeing your case, will verify your identity and ask questions about your bankruptcy filing under oath.

Your creditors can also ask you questions about your financial affairs and the information in your bankruptcy papers, but they rarely do. Read on to learn more about what happens at a Chapter 7 meeting of creditors.

What Is the Purpose of the Chapter 7 Meeting of Creditors?

The Chapter 7 meeting of creditors or "341 hearing" is essentially a hearing to verify your identity and that the information in your bankruptcy papers is accurate and complete. The bankruptcy trustee and creditors ask you questions under oath about your bankruptcy petition and the documents you must provide to the trustee.

The meeting can occur in person or virtually. The trustee will check your identification at the beginning of in-person meetings. If your meeting is virtual, you'll follow the court's procedures for providing identification before the meeting.

How Will I Find Out About the Meeting of Creditors?

The court will send you and your creditors notice of the 341 meeting of creditors and set the date between 21 and 40 days after your bankruptcy filing date. Traditionally, meetings occur in person in a meeting room at a federal building or an offsite location. However, virtual meetings are becoming more common, so you could attend online or by phone even if social distancing requirements aren't in place.

Should I Keep My 341 Meeting of Creditors Notice Nearby?

Absolutely. The notice provides you with lots of essential information, so it's a good idea to keep it in a handy place. For instance, you'll find the following:

• your bankruptcy filing date and case number, and
• the bankruptcy trustee's name and contact information.

You'll find the trustee's contact information on it, as well as your bankruptcy case number, which you'll need to complete your debtor education course, the class you must take after filing for bankruptcy.

Also, you'll want to be able to quickly provide your case number and the filing date to any creditor who might call. After the creditor verifies your bankruptcy, it's unlikely that the creditor will call again.

Who Will Be at the Chapter 7 Meeting of Creditors?

A judge won't preside over the meeting of creditors. In fact, most Chapter 7 debtors don't see a judge at any point throughout the case. Instead, the Chapter 7 bankruptcy trustee appointed in your matter will conduct the meeting.

The trustee will likely schedule up to ten other bankruptcy filers for the same hour, so other Chapter 7 debtors will observe your hearing while waiting for their case to be called. This might or might not be the case if you're scheduled for a virtual hearing.

You'll want to check the calendar to see where you fall on the schedule. If you're attending in person and aren't first on the list, you can observe the process beforehand. If you're scheduled for a virtual meeting, whether you can observe other meetings will depend on how your court sets up the call.

Creditors can attend but rarely do unless they suspect you're hiding assets or committing bankruptcy fraud. The creditors who appear most often are angry ex-spouses and former business partners, creditors who want to know whether you intend to return collateral, such as a financed car, and those with a state court lawsuit stopped by the bankruptcy filing.

The Chapter 7 Trustee's Responsibilities

The bankruptcy trustee is responsible for more than verifying your identity and conducting the meeting. For instance, the trustee must review your bankruptcy paperwork for accuracy, investigate potential bankruptcy fraud, evaluate whether to convert your case to Chapter 13 bankruptcy, and sell "nonexempt property" or property you're not entitled to keep.

To prepare for the meeting of creditors, the trustee will review your bankruptcy paperwork and the "521 documents," such as paycheck stubs, bank statements, and tax returns, that you must provide to the trustee—or file with the court in some areas—at least seven days before the meeting. The trustee can also ask for other financial papers, such as:

• real estate deeds
• car titles
• proof of insurance
• mortgage and vehicle loan statements, and
• marital settlement agreements and court orders.

Some trustees will accept the documents by mail or email. Many require you to upload them to a secure website.

How Do Creditors Use the Chapter 7 Meeting Notice?

The notice provides important deadline dates for your creditors. For instance, a creditor will use information in the notice to find out when to object to:

• your discharge (the order that wipes out qualifying debt), and
• your bankruptcy exemptions (the property you claim you're allowed to keep).

The court will include another deadline date if your case is an asset case, meaning there will be money to distribute to creditors. It's the last day a creditor can file a "proof of claim" form. A creditor uses the proof of claim form to apply for payment on time.

The creditor will list the type of debt, the date incurred, the total amount owed, and other information on the form. After the deadline expires, the trustee will examine each claim before dispersing payment. You'll have the opportunity to review and object to claims, too.

What to Bring to the Meeting of Creditors

If you're appearing in person, you must bring two forms of identification. One must be photo identification, usually a government-issued photo ID, such as a driver's license, passport, or military identification card. The other must provide proof of your Social Security number, such as your Social Security card. If you're attending virtually, check your court's rules for providing identification before the meeting.

If you don't bring identification to the in-person meeting (which happens with some regularity), the trustee might proceed with questioning and have you present identification at the trustee's office or another 341 meeting date, or the entire meeting might be continued to another date.

You'll also bring any documents you didn't submit on time or additional documents requested by the trustee. Because the trustee will need time to review the new records, expect the 341 hearing to be continued. However, many trustees will cancel the continued appearance if you provide what the trustee asks for before the next meeting date.

The Chapter 7 Bankruptcy Trustee Will Examine You Under Oath

The Chapter 7 trustee sells your "nonexempt assets" or the property you can't keep for the benefit of your creditors. Because of this, most questions will involve your assets. For instance, you can expect the trustee to ask you whether:

• you listed everything that you own in the petition
• anything has changed since filing your paperwork
• you're owed any money for any reason, and
• you expect to receive an inheritance.

These are a few of the standard questions the trustee will ask everyone. Afterward, you can expect the trustee to ask questions that are particular to your case.

Your attorney will probably be able to predict the areas of inquiry in advance and might attempt to resolve any issues before the meeting. Learn when you or your attorney might want to contact the Chapter 7 trustee.

Your Creditors Can Also Examine You

Time is limited at the meeting of creditors. With about ten minutes allotted to each debtor, creditors can't conduct a lengthy examination. If a creditor needs more time, many trustees will continue the meeting to another day.

Typically, creditors ask about the nature and location of assets and other financial information. You should be aware that a creditor who shows up is likely assessing whether it makes sense to bring an action against you to dispute the discharge of the creditor's debt and will use evidence gathered at the meeting to its advantage.

Most debtors aren't surprised when a particular creditor appears. For instance, it's common for disgruntled business partners and ex-spouses to attend the hearing.

Other creditors that appear on occasion include those with a "secured claim" or a debt guaranteed by collateral, such as a car, or a creditor who believes you breached the presumption of fraud rules by purchasing luxury goods on credit shortly before the filing might send a lawyer to appear, too. In these situations, the creditor's representative will likely try to settle the matter in the hallway after the meeting.

Concluding the Meeting of Creditors

The bankruptcy trustee "concludes" or ends the meeting if the trustee doesn't need further information or documentation. You won't need to come to another hearing.

The date the trustee concludes the meeting of creditors is important because it triggers certain deadlines, such as the deadline for creditors to object. In most cases, nothing further happens. The filer completes the debtor education course and receives a "discharge" erasing qualifying debts.

If You Can't Attend the Meeting of Creditors

If you don't attend your creditors meeting at the scheduled time, the court will dismiss your bankruptcy case. If you can't make your meeting of creditors, notify the trustee immediately. Whether your hearing will be rescheduled will likely depend on your reason for missing it.

While work and travel commitments usually aren't compelling, a trustee will probably continue a case for one of the following reasons:

• medical or family emergency
• serious medical condition
• natural disaster
• incarceration, or
• active military service.

If the court dismisses your case, you can usually refile immediately. However, you partially lose the automatic stay when you refile for bankruptcy within one year of dismissal. In such a case, the automatic stay in the new matter will only last 30 days. You'd need to file a motion to extend it before it expires to keep its protection.

Need More Bankruptcy Help?

Did you know Nolo has made the law accessible for over fifty years? It's true—and we wholeheartedly encourage research and learning. You'll find many more helpful bankruptcy articles on Nolo's bankruptcy homepage, and information needed to complete the official downloadable bankruptcy forms is located on the Department of Justice U.S. Trustee Program.

However, online articles and resources can't address all bankruptcy issues and aren't written with the facts of your particular case in mind. The best way to protect your assets in bankruptcy is by hiring a local bankruptcy lawyer.