Everyone who files a Bankruptcy case, whether it is a personal case or a business case, has to attend the Meeting of Creditors, which is sometimes called the “341 Meeting” because it is required by Section 341 of the Bankruptcy Code. “Meeting of Creditors,” as it is called in the statute, is somewhat misleading in consumer cases as creditors do not actually attend this meeting in many cases. Many clients are also surprised that this meeting is not in a courtroom (though it may be in the same building) and the Bankruptcy Judge will not attend. Instead, it is typically the debtor, their lawyer and the Chapter 7 or Chapter 13 Trustee. In fact, for many individual cases, this is the only time they ever have to go to the courthouse during their case. What happens at these meeting? Here is a summary of the typical case:
- The purpose of the meeting, held 3-5 weeks after the case is filed, is to allow the Trustee and creditors to confirm the accuracy of your Bankruptcy petition and schedules and to ask some basic questions about your case. You will be sworn in and testifying under oath, just as you would in a Courtroom, and the meeting will be recorded. Trustees normally begin with a series of stock questions, including whether you reviewed your documents, whether they were true and accurate when you signed them and whether any information has changed. The Trustee will also check your identification and social security card to verify identity. Trustees will ask whether you have the right to sue someone else (such as for an auto accident) or whether you expect an inheritance in the near future. For many cases, the Trustee may have no questions beyond their stock list.
- If you own real property or other valuable assets such as vehicles, recreational vehicles, etc., the Trustee may ask about the value of these assets and how you determined the value stated on the schedules. For real estate, such as a home, the Trustee has most likely already researched the value of the property on the internet. It is rarely a problem that your estimate is different than the Trustee’s estimate. It is fine to say you obtained the value from a website such as Zillow.com or from sales of similar homes in your neighborhoods. Often a home will be worth less than online estimates due to deferred maintenance issues, and Trustees understand this is an issue in Bankruptcy cases.
- If you have a lawsuit or potential lawsuit against another person, or a claim against someone, the Trustee will likely ask questions about the lawsuit or claim and ask for supporting documents.
- You may be asked about recent large transfers to family members or others before filing the case.
- If you own a business or other business entities, the Trustee will ask basic questions about the businesses and any property owned by them.
- The Trustee may ask for additional documents, such as tax returns, bank statements and pleadings in lawsuits in which you are a party.
- Creditors or their attorneys may attend the meeting and ask questions about your case and schedules. For example, a secured lender may ask about the value or condition of your home or car and whether or not you intend on keeping the property. Rarely does a First Meeting turn into a confrontational atmosphere and in most of those cases you and your lawyer will know in advance there is an issue with a particular creditor.
- The First Meeting is not intended to be a lengthy deposition or examination. Depending on the case and Trustee, a First Meeting can be as short as 6-8 minutes and rarely do they go over 15 minutes for consumer cases. If the Trustee or creditors need more information, they normally ask for documents or schedule a Rule 2004 Examination for a later date.
Here are some tips on how you should you prepare for the First Meeting of Creditors:
- Review your schedules a day or so before the meeting to familiarize yourself with the information and make sure they are still correct. If changes need to be made, notify your lawyer before the meeting. There is no need to memorize the schedules, but you should be prepared to answer any questions about them. Bring a copy to the meeting.
- Bring your government issued identification and social security card. If you don’t have a social security card and cannot obtain a replacement before the meeting, many Trustees will accept a document prepared by a government agency that has your full number. Usually, forms received from the Internal Revenue Service or Social Security Administration are sufficient. Documents prepared by you, such as your tax returns, are not acceptable. The penalty for not having these documents is having to make a second trip to the meeting and perhaps additional fees for your lawyer.
- Be on time. Make sure you know where the meeting is held, including building and room number, and where to park. In a few places, meetings are not held in a courthouse, but in a hotel conference room or other location. You also need to add a few minutes to get through security. Your lawyer or staff can assist with directions.
- I normally suggest clients arrive in the meeting room 15-20 ahead of their scheduled time to observe meetings in other cases. In virtually all cases, clients are relieved to find out that the meeting is much less stressful than they expected. It also gives them a few more minutes to review schedules and ask me any last minute questions.
- Do not worry about other lawyers or individuals in the room or what they will think of you or your case. Just as you are concerned only about your case and will not remember any details about anyone else, they will also not remember you or your case.
- Finally, and most importantly, make sure you schedule the meeting on your calendar, get the time off from work, and show up. If you do not, it will be re-set to a later date. There is no getting out of this meeting if you want your case to continue. In the Northern District of Georgia, it is generally two strikes and you are out. If you do have a conflict with the date, such as non-refundable vacation plans or a true emergency, it is possible to reschedule the meeting. Make sure you let your lawyer know as soon as possible, since many lawyers charge additional fees for having to attend a meeting or hearing that has to be rescheduled.
If you have any questions at all about your First Meeting of Creditors, speak with your lawyer in advance of the meeting.