Bankruptcy creditors’ first meeting

3 key takeaways

• The 341 meeting allows creditors to ask the debtor questions about their finances and bankruptcy case.
• It is typically held shortly after the bankruptcy filing and is led by the bankruptcy trustee.
• Attendance by the debtor is mandatory, but creditors’ attendance is optional.

What is a bankruptcy creditors’ first meeting?

The bankruptcy creditors’ first meeting, officially known as the 341 meeting (named after Section 341 of the Bankruptcy Code), is a key event in the bankruptcy process. This meeting is an opportunity for the bankruptcy trustee and creditors to ask the debtor questions about their financial affairs, assets, liabilities, and any other pertinent matters related to the bankruptcy case.

The primary purpose of this meeting is to ensure transparency and gather information that can help the trustee and creditors understand the debtor’s financial situation. It helps verify the accuracy of the information provided in the bankruptcy filings and identify any potential issues or discrepancies.

How does the 341 meeting work?

1. Notification and scheduling: After the debtor files for bankruptcy, the court schedules the 341 meeting and notifies all creditors. This meeting usually takes place 20 to 40 days after the bankruptcy filing.
2. Attendance: The debtor must attend the meeting and answer questions under oath. The bankruptcy trustee presides over the meeting, and creditors may attend, although their presence is not mandatory.
3. Questioning: During the meeting, the trustee and any attending creditors can ask the debtor questions about their financial situation, assets, debts, income, expenses, and the circumstances leading to the bankruptcy. The debtor must answer these questions truthfully and to the best of their knowledge.
4. Documentation: The debtor must bring specific documents to the meeting, such as identification, tax returns, pay stubs, and any other relevant financial records.

Purpose of the 341 meeting

• Verification: To verify the accuracy of the debtor’s bankruptcy petition and schedules.
• Transparency: To provide creditors with a clear understanding of the debtor’s financial situation.
• Identification of issues: To identify any potential issues, such as undisclosed assets or fraudulent transfers, that may affect the bankruptcy case.
• Resolution: To facilitate the resolution of any disputes or concerns raised by creditors.

Benefits of the 341 meeting

• Clarification: It provides a platform for creditors to get answers to their questions directly from the debtor.
• Trustee assessment: Helps the trustee assess the case and make informed decisions about asset liquidation and distribution.
• Debtor accountability: Ensures that the debtor is held accountable for providing accurate and complete information.

Real-world application

Michael’s situation: Michael, a self-employed contractor, filed for Chapter 7 bankruptcy due to overwhelming debt from medical bills and business expenses. After filing, he received a notice for his 341 meeting scheduled in three weeks.

Preparing for the meeting: Michael gathered all required documents, including his identification, recent tax returns, bank statements, and pay stubs. He reviewed his bankruptcy petition to ensure he could accurately answer any questions.

During the meeting: At the 341 meeting, the trustee asked Michael about his income, the nature of his debts, and the reasons for his financial difficulties. A few creditors also attended and inquired about specific debts and assets. Michael answered all questions truthfully and provided additional documentation when requested.

Outcome: The trustee found no discrepancies in Michael’s filings, and the meeting concluded without any significant issues. Michael’s case proceeded smoothly, leading to the eventual discharge of his debts.