Do you need to worry about your 341 meeting in bankruptcy?
Transcript:
Hi, I'm Matt MacArthur, bankruptcy attorney at Clear Counsel Law Group. I had somebody in my office the other day that was really upset and anxious and quite nervous about a meeting that we were going to have with creditors and the bankruptcy courthouse. This is a meeting that happens in all bankruptcy cases, and I thought this would be a great opportunity to address what goes on in these meetings, and perhaps to put all of your minds at ease about what actually occurs there. This meeting is called the 341 meeting of creditors. The 341 number comes from the section of the bankruptcy code that says that we have to have this meeting. The meeting of creditors part is perhaps a bit of a misnomer because creditors will rarely appear at these hearings. Creditors do have the opportunity to appear if they want to, but I would say it's probably less than 5% of cases, perhaps less, in which creditors actually do show up and ask questions. What usually happens is it'[s a meeting that happens at the bankruptcy courthouse down in a side-mediation type room, where a court official called a bankruptcy trustee will record the hearing and swear in the debtor under oath.
"Do you solemnly swear to tell the truth, the whole truth, and nothing but the truth?" Type of oath. Once you're under oath, the trustee will ask you questions, and the trustee's purpose is typically twofold. One, the trustee is looking to determine whether not you actually filled out all the paperwork correctly, that everything was completely and accurately listed in the bankruptcy documents, that you actually reviewed these documents with your attorney and signed these documents authorizing the filing of the bankruptcy case. The second, the trustee is also looking to see whether not there's any assets that are unprotected or not exempt. The trustee is the individual that's responsible for collecting any nonexempt assets, selling them off for creditors in a Chapter 7 case, or making sure that adequate payments are being provided for in a Chapter 13 plan, and taking care of the administrative side of the bankruptcy case. If creditors are present, they'll have an opportunity to ask questions as well.
Obviously, you'll be under oath at this hearing, so the best advice that I can give is to tell the truth. You get into a lot of trouble when you don't tell the truth, and the vast majority of cases ... Individuals have nothing to hide anyway, so honesty is clearly the best policy at these hearings. A typical hearing lasts anywhere from 3-6 minutes depending on the complexity of the case. They can go much longer if there's a lot of complicated issues involving businesses or non-exempt assets, but the typical person filing for bankruptcy will only be in the courtroom where they're being questioned for a matter of minutes, and then they'll be on their way without any real reason to sweat. The biggest caution that I give to my clients is to tell the truth, and I try to tell all of them to relax because these are really ... Although they're unofficial hearings ... They are official hearings and you will be under oath, there's kind of a laid back setting to them. The trustees are typically very nice, and it's one more obstacle that you have to go through to get your bankruptcy discharge, but on a whole, these hearings are nothing to fear as long as you tell the truth. Then you've disclosed everything to your bankruptcy attorney. Your attorney will have you well-prepared for these hearings. This is Matt MacArthur, bankruptcy attorney at Clear Counsel Law Group, saying goodbye for now.
