If the hardest part about filing bankruptcy is deciding to file, the second most difficult part, for most people, is attending the 341 Meeting of Creditors, or First Meeting. Anxiety and nervousness is often misplaced, as the 341 Meeting is serious, but should not be frightening. The purpose of this post is to dispel some of the mystery surrounding the 341 Meeting. To get it out of the way, the name, “First Meeting” is a misnomer — there are no additional meetings. For this reason, we often just call it the 341 Meeting, as it is set pursuant to §341 of the Bankruptcy Code.
The 341 Meeting typically takes place about 30 days after the case has been filed.
The 341 Meeting is NOT court. You are not in trouble, there is no judge, and there is no judgement being made regarding whether filing bankruptcy was the right thing for you (i.e., whether you
“qualify”). However, it is as close as most clients get to “going to court.” This is because it can happen in a Courthouse (Statesville Chapter 7 341 meetings happen at the U.S. Courthouse, at 200 West Broad Street, Room 301, Statesville, NC 28677) although, they do not have to (All Chapter 13 341 Meetings take place in our office and for Charlotte Chapter 7s, in the U.S. Bankruptcy Administrator’s Office, 402 West Trade Street, Suite 205, Charlotte, NC 28202, across from the Federal Courthouse). Judges are not present. However, your Trustee will be present and your attorney will be with you.
Creditors may, but very rarely do, attend the 341 Meeting. It would be extraordinarily rare (but not necessarily bad) to see a representative of Bank of America or Chase at the 341. The most common time when creditors appear is when a person has a small business and they owe another small business money. Even if they do appear, the 341 Meeting is for clarifying facts, not challenges.
Most 341 Meetings are solely between the person who filed (the debtor) and the Trustee. The Trustee calls the debtor’s name, the debtor comes to the table where he is sworn in. The meeting is recorded. The Trustee asks questions about the contents of the bankruptcy petition, and has pretty broad discretion regarding what may be requested (a copy or the 341 Meeting Trustee guidelines are here). In most instances, the questions are typically the following:
- Did you read the petition before filing?
- Did you sign the petition before filing?
- Did you list all of your assets?
- Did you list all of your debts?
- Are the schedules and statements true and accurate?
- Do you have any amendments?
- Do you have any domestic support obligations?
- Have you read the Bankruptcy Information Sheet provided by the Trustee (Charlotte only)?
Sometimes, if there are exposed assets because the exemptions did not protect all of a debtor’s things, the Trustee will discuss the amount of exposed equity and how to repay the creditors, although that is typically discussed between the attorney and the Trustee at a later date.
Although it may be intimidating, keeping the following rules in mind will help ensure that the meeting is as painless as possible:
1. Tell the truth
2. Listen carefully to the FULL question before answering.
3. Answer in as few words as possible.
4. Don’t explain, expand, justify or speculate unless your attorney encourages you to do so.
5. If your attorney starts talking, you stop talking.
This is NOT a test or an interrogation — the purpose is to validate the information in the bankruptcy papers under oath (which should not be a problem, as the petition has been reviewed a number of times before it was filed) and to provide the Trustee with information needed to determine if the exemptions are sufficient to protect assets (which your attorney should already know before filing). Clients do not “mess everything up” at a 341 Meeting, but they do sometimes work themselves into a ball of anxiety ahead of time, and that is not necessary. In the Western District of North Carolina, 341 Meetings are typically quite short and the Trustee and your attorney exchange much of the documentation before or after the 341 Meeting. Therefore, you do not need to bring anything other than identification unless your attorney has instructed you otherwise.
Finally, remember to bring identification (Drivers License is fine), leave your phone in your car (it is not allowed in Court Rooms), dress like you’re going to church, and trust that your attorney is there to help you.