What Happens at a Chapter 7 Bankruptcy Meeting of Creditors?

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

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

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

The Chapter 7 meeting of creditors (also called the 341 hearing) is a meeting at which the bankruptcy trustee and your creditors get to ask you questions under oath about your bankruptcy petition and the documents you're required to provide the trustee. The creditors' meeting is essentially a hearing used to verify that the information contained in your bankruptcy papers is accurate and complete.

You'll also be required to prove your identity by presenting two forms of identification, such as a driver's license or another government-issued identification, such as a military identification card or passport and your social security card. These steps prevent and identify fraudulent filings.

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 your meeting of creditors.

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 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 aren't first, you'll be able to observe the process ahead of time if you attend in person and possibly if you're scheduled for a virtual hearing, depending on how your court sets up the call.

The bankruptcy court will also notify your creditors of the meeting of creditors. However, creditors rarely attend 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 creditors who were suing you in state court before your bankruptcy filing. Learn about lawsuits stopped by bankruptcy.

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. The court will 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. Other bankruptcy filers will appear at the same meeting time, so you'll want to check the docket to see where your case falls on the schedule. However, you might attend virtually if social distancing requirements are in place.

You can view a blank copy of the notice of the meeting of creditors form by visiting the U.S. Court's bankruptcy website.

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 use the trustee's contact information to forward the 521 bankruptcy documents you're required to provide to the trustee before the 341 meeting of creditors, such as paycheck stubs, bank statements, and tax returns.

You'll also need your bankruptcy case number to complete your debtor education course, the class you must take after filing for bankruptcy.

Finally, you'll provide the 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.

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.

The Trustee's Responsibilities

The bankruptcy trustee is responsible for more than conducting the 341 meeting of creditors. For instance, the trustee must:

• review your bankruptcy paperwork for accuracy
• verify your identity
• investigate potential bankruptcy fraud
• evaluate whether to convert your case to a Chapter 13 bankruptcy, and
• sell nonexempt property (property you're not entitled to keep) for creditors.

Learn what happens when the bankruptcy trustee suspects fraud.

The Trustee Reviews Your Case Before the 341 Hearing

To prepare for the meeting of creditors, the trustee will review your bankruptcy paperwork and the 521 documents. 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 email, and others will require you to upload them to a secure website or send them by mail.

What to Bring to the Meeting of Creditors

You must bring photo identification and proof of your Social Security number. Otherwise, the trustee will likely do one of the following things:

• Move forward with questioning and have you present identification later (either at the trustee's office or another 341 meeting date).
• Continue the entire meeting to another date.

Also, bring any documents you don't submit to the trustee in advance. 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 everything appears in order and you provide any other documents the trustee asks for beforehand.

The Chapter 7 Bankruptcy Trustee Will Examine You Under Oath

Before the COVID-19 pandemic, 341 meetings occurred in person. However, meetings are being held virtually as of the time of writing, so unless the current social distancing requirements change, you'll attend online.

The trustee will examine you under oath after calling your case. Before your examination can begin, you'll provide your identification and proof of social security number to the trustee.

If you appear virtually, you'll likely forward copies of your identification to the trustee before the meeting. Otherwise, you'll present it to the trustee once you're seated at the meeting room table at the front of the room.

The Chapter 7 bankruptcy trustee's role at the meeting of creditors is to verify the accuracy of the information disclosed in your bankruptcy papers. Since a Chapter 7 trustee is authorized to sell your "nonexempt assets" or the property you can't keep for the benefit of your creditors, most questions will involve your assets.

When the Chapter 7 trustee calls your matter, the trustee will begin by asking you a series of standard questions, such as whether:

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

It's common for the trustee to ask questions 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.

Your Creditors Can Also Examine You

When you file for Chapter 7 bankruptcy, creditors can also attend the meeting of creditors and examine you under oath. However, since time is limited, creditors can't conduct a lengthy examination at the creditors' meeting. 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.

A creditor 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 the latter cases, 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 any further information or documentation. You won't need to come to another hearing, and you'll receive your "discharge" or the order erasing qualifying debts after satisfying all other requirements.

However, if you forgot your identification, or the trustee or a creditor requires further information, the trustee will set another hearing date.

If you provide the requested documentation before the continued meeting date, the trustee might take the continued meeting off the calendar. But, if the trustee has more questions, you'll have to go to the next hearing.

If You Can't Attend the Meeting of Creditors

If you don't attend your meeting of creditors at its 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. For instance, 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.

The trustee might allow you to attend telephonically, too.

If the court dismisses your case, you can usually refile immediately. However, you 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'll need to file a motion to extend it before it expires to keep its protection.

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