The 341 meeting of creditors is one step in the bankruptcy process. It occurs in both Chapter 7 bankruptcy and Chapter 13 bankruptcies. However, since these bankruptcies manage debt differently the bankruptcy trustee may ask different kinds of questions.
In this article, we’ll discuss the bankruptcy process and what to expect during the meeting of creditors. While many folks are understandably anxious about the meeting of creditors, a bankruptcy attorney can help you to prepare for it. Your attorney will give you guidance and ensure that your information is in order so that you are not blindsided during the meeting.
If you are considering bankruptcy, Lorraine M. Greenberg & Associates can help. Contact us today.
What Is the Role of the Bankruptcy Trustee?
The trustee works on neither your behalf nor the court’s. Their job is to ensure your creditors are paid to the extent that is possible. In Chapter 7, this means going over your assets and determining if there is anything that they can liquidate to repay your creditors. In Chapter 13, this means going over your repayment plan and managing any of the creditor’s objections to the plan.
A Chapter 7 bankruptcy trustee is paid a percentage of whatever they can recover from you to repay your creditors. This ensures that they have a serious incentive to find assets worth liquidation. Despite that, they normally don’t.
Preparing for the Meeting of Creditors
For those who file Chapter 7 bankruptcy, ensuring that all the accounts that you want discharged are included in your paperwork is important. Only those accounts will be discharged, so if you leave anything out, you’re still on the hook to repay that debt. If you missed something, ensure that your attorney files an amendment or, failing that, bring any changes you want to make to the attention of the trustee during the meeting.
What Do I Need to Bring to the 341 Meeting of Creditors?
You should bring the following to the meeting:
- Photo ID,
- Your Social Security card,
- Proof of income,
- Bankruptcy documents,
- Bank account statements
- Investment account information,
- Means test documents (if you filed for Chapter 7),
- Documents specifically requested by the trustee.
What Will the Meeting of Creditors Be Like?
The meeting of creditors is held in a simple meeting room — not a courtroom. It will be attended by you and your lawyer, the trustee, and if your creditors choose to show up, then they will be there too. Sometimes they do and sometimes they don’t. The trustee swears you in and the questions begin.
What Kinds of Questions Does the Trustee Ask?
Generally, the 341 meeting of creditors is purely perfunctory. You and the trustee are there with your lawyer and the trustee will ask you a series of routine questions. These may include:
- How were you able to afford your house, car and other valuable possessions?
- Are you expecting any tax refunds?
- Did you transfer any property within the last year?
- Is anyone holding property that belongs to you?
- Will you be receiving an inheritance or a life insurance payout any time within the next year?
- Will you be receiving any property from a divorce?
- Do you have any money in business ventures?
- Have you made any large payments to relatives?
- Are you owed money?
These questions seek to establish that you are being honest with the court and the trustees. If it later turns out that you lied during this process, you have committed perjury and bankruptcy fraud. Don’t lie.
In many instances, those filing for bankruptcy think they can “hide” property by selling it or giving it away to friends or relatives who will then give it back at a later date. The trustee is asking questions about transferring property for precisely that purpose. If you have done this, answer honestly and your bankruptcy may still go through. If you don’t answer honestly and it is later determined that you defrauded your creditors and the court, you could be guilty of committing bankruptcy fraud which is, in the majority of states, a felony that carries jail time.
A Chicago Bankruptcy Lawyer Can Help You Through the Process
If you find yourself intimidated by the bankruptcy process, know that your attorney will be there to guide you through it. Lorraine M. Greenberg and Associates has helped many clients get a fresh start through bankruptcy. Contact us today.