A Meeting Of Creditors

A group of bees is called a swarm. A group of rhinoceroses is called a crash. A group of hyenas is called a cackle. We’re not sure if there is an official term for a group of creditors, but we suggest “a headache.”

In all seriousness, getting a filer’s creditors together is part of every bankruptcy process. Most of the time, it is a simple, straightforward process that is not at all headache inducing.

Everyone who files for bankruptcy, either chapter 7 or chapter 13, must attend a hearing called the 341 meeting of creditors. The number 341 comes from the section of the bankruptcy code that describes the meeting. The name “meeting of creditors” tells you exactly what the event is. It is an opportunity for all of a bankruptcy filer’s creditors to come together and verify the bankruptcy they have been notified of is legitimate.

The meeting is overseen by the bankruptcy trustee handling your case, not a judge. The trustee will kick things off by swearing you in and verifying your identity. If you are filing bankruptcy jointly with your spouse, he or she will need to show up and have his or her identity verified as well. The trustee does this to protect you from identity theft and protect everyone involved in your case from fraud.

The trustee will then ask you a few questions about your finances. The goal is to ensure the case you have filed is not fraudulent, and all of your paperwork is in order. The questions are all very business-like, and are not meant to harass or embarrass you.

Your creditors will then have an opportunity to ask you additional questions about your finances. However, it is rare for creditors to show up to this meeting, let alone ask any questions. If a creditor does show up, it is usually because you have a personal relationship with them and they want the bankruptcy version of their day in court — think ex-spouses and former business partners. The trustee will tightly control the amount of time a creditor can ask you questions, and cut them off if their questioning is improper.

How to Prepare for the 341 Meeting

Your attorney will tell you exactly what you need to bring and do in order to prepare for your 341 meeting. In general, though, the hard work is done long before your meeting.

By the time the meeting is scheduled, you will already have provided all of your paperwork, documented your assets, told your creditors that you’re filing bankruptcy, and gone through your finances with a microscope. You should bring your identification to the 341 meeting, as the trustee will verify your identity as part of their process. You may also want to bring a copy of your bankruptcy filing in case you need to refer to it or verify anything within it.

In the weeks leading up to the meeting of creditors, you should also review your bankruptcy filing for accuracy. Remember, you are on the hook for everything contained within your documentation. If anything has changed or you’ve since found inaccuracies, you absolutely must amend the document accordingly.

The whole thing typically lasts less than a half hour.

The most important thing to keep in mind as you are being questioned is that you are under oath. Telling the truth is not optional. Lying or trying to commit fraud will get you into serious legal trouble. If you don’t know the answer to a question, you should admit that you don’t know rather than guessing.

If you are a Padgett & Robertson client, we will help you prepare for the meeting so you are ready to answer the questions trustees typically ask. We will also be there with you to help you if you are asked something you don’t know the answer to. In the unlikely event a creditor shows up and does anything improper, we will be there to put a stop to it. Our job is to ensure your bankruptcy case is not a headache, no matter how many creditors are involved.