What Happens at a 341 Meeting of Creditors?

What Is the Bankruptcy 341 Meeting of Creditors?

 

The 341 Meeting of Creditors is the first hearing that you are required to attend (now by Zoom) after filing a Chapter 7 or Chapter 13 bankruptcy.

In the vast majority of Chapter 7 bankruptcy cases, it is the only hearing that you will be required to attend.

The 341 Meeting is scheduled by the clerk of the Court the same day that you file a Chapter 7 bankruptcy (unless it is filed in the middle of the night) and within a few days of filing a Chapter 13 bankruptcy. It is typically held about a month after your bankruptcy case is filed. This gives you plenty of time to make arrangements to take time off of work in order to attend.

The 341 Meeting is not a “court hearing,” per se. It does not require that that you step into a courtroom or appear before a judge. Click here to read my blog post on Top 5 Mistakes you can make at your 341 Meeting of Creditors.

However, it is a required and necessary procedural step in your judicial bankruptcy process, and what happens at the 341 Meeting of Creditors will have legal ramifications for the outcome of your Chapter 7 or Chapter 13.

The purpose of the 341 Meeting of Creditors is to allow parties who have an interest in your bankruptcy proceeding to ask you questions about your debt, income, expenses, and assets while you are sworn under oath.  Shortly after your bankruptcy case was filed, all of the creditors listed in your petition were sent an Official Bankruptcy Notice by the clerk of the bankruptcy court notifying them of your bankruptcy filing.  The meeting is your creditors opportunity to ask you questions regarding the the state of your financial affairs and the use of the credit extended to you.  In the vast majority of cases, very few, if any creditors actually attend the hearing, despite having the forum to do so.  Some creditors will routinely send attorneys to ask questions at the hearings.  Credit Unions typically send attorneys when a member of the credit union files a bankruptcy.  They usually are there to propose a reaffirmation of the debt owed to the credit union.

How long it takes and what sort of questions are asked differ depending upon whether you have filed a Chapter 7 bankruptcy or a Chapter 13 bankruptcy.

 

UPDATE!  All Hearings for Bankruptcy Cases filed after September 2023 will be Held by Zoom.

 

As of September 2023, for all cases filed in the Eastern District of Michigan (Metro Detroit, Flint and Bay City)  the .341 Meeting of Creditors will be held by video conference which will be conducted via Zoom.

To Join the meeting go to Zoom.us/join and enter your Trustee’s Meeting ID and Passcode.  Trustee Zoom links can be found here: Michigan Trustee Zoom .341 Links  

All participants will need an electronic device (computer, laptop, tablet, or smartphone) with a microphone, camera, and internet access, to participate in the Zoom 341 meeting. Instructions on how to connect to a Zoom 341 meeting, including how to download the Zoom application, how to test and connect to a Zoom meeting, and troubleshooting tips, can be found at my blog post here.

When prompted to enter a name, participants should enter their first and last name, so each participant may be identified properly during the meeting. Participants should join the 341 meeting at least ten (10) minutes before the scheduled start time. Participants should mute their microphones and shut off their video until their case is called.  Once the case is called, both the Debtor and the Debtor’s counsel are expected to appear by video.

While the Debtor is sworn in and testifying, the Debtor should be alone, unless the Debtor is appearing from the same location as their attorney, or is a co-Debtor to the case.  The Debtor should not communicate with any person regarding the subject of their testimony, by electronic means or otherwise. The Debtor should have readily available a copy of the filed schedules and statement of financial affairs, and any other documents previously requested by and provided to the Trustee.

The Trustee will make an audio recording of the 341 meeting which will constitute the official recording of the 341 meeting. All other recordings, including video or audio recordings of the 341 meeting, are prohibited.

Debtors must submit to the Trustee a copy of their original government-issued photo identification and confirmation of their social security number or individual tax identification number, at least seven (7) days prior to the scheduled 341 meeting of creditors.

The Trustee will not accept personal identifiable information during the meeting. Failure to provide copies of driver’s licenses and social security cards seven (7) days advanced of the meeting will result in the case being adjourned to a later date.

ACCEPTABLE PHOTO IDENTIFICATION DOCUMENTS

• Driver’s license
• US government ID
• State ID
• Student ID
• Passport or current visa, if not a US citizen
• Resident alien card
• Identity card issued by a national government authority

ACCEPTABLE SOCIAL SECURITY NUMBER DOCUMENTS

• Social Security card
• Medical insurance card
• Pay stubs
• W-2 form
• IRS form 1099
• Social Security Administration statement
• ITIN (only if debtor is not eligible for a SSN)

 

What Is NOT Different between the Chapter 7 and Chapter 13 Section 341 Meetings?

 

The common features between the Chapter 7 341 and the Chapter 13 341 are these:

• You are required to attend in person (as of October 2023 by Zoom teleconference);
• You must bring with you your driver’s license and your Social Security card—and any other documents needed for your bankruptcy that your bankruptcy lawyer has told you to bring;
• You must arrive ahead of time to speak with your bankruptcy lawyer prior to the 341 Meeting;
• You must be able to personally answer questions about the disclosures in your bankruptcy petition and schedules without assistance from anyone else;
• If you are in need of a translator, the Bankruptcy Court will provide one at no charge;
• Your bankruptcy attorney will be in attendance with you, so don’t worry!

 

The basic procedure of the 341 Meeting is also the same regardless of which form of bankruptcy you have filed:

• You arrive a little early to speak with your bankruptcy lawyer;
• You enter your hearing room with your bankruptcy lawyer (or he or she will join you shortly, if representing clients at multiple 341 Meetings in different hearing rooms simultaneously);
• When your case is called, you walk up and sit at the table with the Chapter 7 or Chapter 13 Trustee presiding over the meeting;
• You or your attorney will hand your ID cards to the Trustee or Trustee’s paralegal;
• You will be sworn in under oath;
• You will then be asked a series of questions, which you and not your attorney will need to answer—under penalty of perjury;
• If any creditors appear, they will also ask you questions.
• And that’s basically it.

 

So What Is the Difference Between a Chapter 7 and Chapter 13 341 Meetings?

 

The main point of differentiation between the Chapter 7 and Chapter 13 341 Meeting lies in the underlying mechanics of the different forms of bankruptcy themselves.

That is, the difference is in the fact that Chapter 7 bankruptcy is a “liquidation” bankruptcy in which assets are potentially liquidated for the benefit for creditors while Chapter 13 is a “reorganization” bankruptcy in which your debt is restructured over 3-5 years so that you can repay it.

The jobs, therefore, of the Chapter 7 and Chapter 13 Trustees presiding over your 341 Meeting are different—and so will be the types of questions that they ask you.

 

The Chapter 7 Bankruptcy 341 Meeting

 

The job of the Chapter 7 Trustee is to seize non-exempt assets of the debtor (if any) and reduce them to pool of cash for distribution to your creditors.  Fortunately, in the vast majority of Chapter 7 cases filed both in the Detroit Bankruptcy Court, as well as nationally, there are no assets, above what can be protected using applicable bankruptcy exemptions, to be liquidated and distributed to creditors. A typical Chapter 7 Meeting of Creditors takes less than 5 minutes and is usually the only hearing that must be attended.  In the majority of Chapter 7 cases, there are no hearings in front of the Bankruptcy Judge.

In those small percentage of cases in which there are assets to be liquidated, the Chapter 7 Trustee retains a percentage of what he or she liquidates as a commission.

Thus, the Chapter 7 Trustee is highly interested in confirming that you have fully disclosed all of your assets and claims to assets, and their respective values, in your bankruptcy petition schedules.

Your bankruptcy attorney will have provided all of the documentation required by the Chapter 7 Trustee to verify this in advance of the 341—if you provided to your attorney what was requested.

After swearing you in, you will sit across from the Chapter 7 Trustee with your bankruptcy attorney seated nearby.

The Trustee—any of them—will begin with a routine series of questions that is nearly always identical in every case, with slight variation.

These are questions you will have already been asked a number of times by your own bankruptcy lawyer—if you retained an experienced attorney. Some common opening Chapter 7 341 questions include:

 

• Have you disclosed everything you own and everyone you owe in your petition and schedules?
• Did you review your bankruptcy petition and schedules before you signed them?
• Did you read and review the Bankruptcy Information Sheet provided by the United States Trustee’s Office?
• Was all of the information contained in the petition and schedules true and accurate at the time you sign them?
• Does the information contained therein remain true and accurate today?
• Are there any changes that you wish to bring to the Trustee’s or Court’s attention?
• Did you list all of your assets and creditors on your bankruptcy petition and schedules?
• Do you own any real estate?
• Have you owned any real estate in the past 6 years?
• Have paid back any money to anyone in the last year over $600?
• Are you suing anyone or believe you might have a claim for which you could file a lawsuit?
• Do you own any stocks, bonds, certificate of deposits, etc.?
• Have you sold, transferred or given away any property in the last 2 years?
• Are you expecting any inheritances?
• And so on.

 

These are factual questions, designed to elicit information that will help them to determine whether they need to dig any deeper into any point.

Many Chapter 7 Trustees enjoy opening with, “Why did you decide to file for bankruptcy at this time?

This is sort of a trick question.

First of all, you don’t need to have a reason to file for bankruptcy. If you are an honest debtor legitimately in need of a fresh start, there is no other legal consideration involved in your personal decision to take this step at this point in your life.

This is a purposefully open-ended question (rather than the other “Yes or No” questions that the Trustee will utilize) designed to get you talking.

Although obliged to answer, you do not need to tell a Chapter 7 Trustee your life story.

Second, everyone has a different reason. Just provide a bullet-point version of that reason, and stop after 1 or 2 sentences. If the Trustee wants to ask a follow-up question, he or she can do that.

Third, this sort of question is technically outside the scope of the Chapter 7 Trustee’s role. Remember that the Chapter 7 Trustee’s job is to liquidate property that is not exempted in order to mail checks to your creditors.

That’s it.

The Chapter 7 Trustee is not a judge, and he or she is not an attorney with the US Trustee’s Office. (It is the US Trustee’s job to consider whether you are eligible for Chapter 7 bankruptcy and to file a motion to dismiss your case if a member of that office thinks you are not.)

Nonetheless, you must answer in some satisfactorily disclosing manner. Just get to the point when asked any open-ended question of that sort.

If your Chapter 7 bankruptcy case is routine as far as they go and you have provided the required documentation to the Chapter 7 Trustee fully prior to the hearing, your 341 Meeting will generally last no more than 5 or 10 minutes.

If your Chapter 7 is not one which will generate money with which to line the Trustee’s pocket, he or she will want to get yours over with and move on to the next case as quickly as possible.

Most cases are in the “routine” spectrum for both your bankruptcy attorney and your Chapter 7 Trustee. If yours is not, you will have discussed this with your attorney in advance.

There is no reason to be worried and fearful while waiting for your 341 date to arrive.

 

The Chapter 13 Bankruptcy 341 Meeting

 

The Chapter 13 Section 341 Meeting of Creditors is a slightly more ceremonial affair—at least in Detroit.

If yours is a Flint or Bay City Chapter 13 341, the procedure and feel of the hearing will not be any more uptight than is a Chapter 7 341.

The Chapter 13 Trustees in Flint and Bay City are generally more relaxed, friendly, and enjoy getting to the point more than the Chapter 13 Trustees in Detroit, who seem to constantly think that they are preparing to crown the next Queen of England.

While the Chapter 7 341 Meeting is largely the same regardless of whether you have filed your case in the northern portion of the Eastern District of Michigan (Bay City, Flint, Saginaw, etc.), the Chapter 13 procedure varies greatly from location to location.

In the northern division locations, the Chapter 13 341 Meeting procedure will simply require you to show up with your IDs, wait your turn, and answer some questions.

The questions themselves will not vary much by location, and they are the primary point of difference between a Chapter 7 and Chapter 13 341 Meeting.

The questions at this 341 will be less focused on your property and more focused on your income and expenses.

This is because it is not the job of the Chapter 13 Trustee to liquidate assets but simply to accept your monthly Chapter 13 plan payment and to then distribute those funds out to your creditors as require by your (eventually) confirmed Chapter 13 plan.

In Detroit, the Chapter 13 341 Meeting is a bit more of a ritual than in the other cities.

If your case is assigned to 2 of the 3 Chapter 13 Trustees, you will need to attend a 1-hour orientation prior to the 341 Meeting itself. You will therefore likely arrive 1 hour earlier than your attorney in order that you enjoy an info-session presented by the Trustees’ staff members on the general topic of surviving your Chapter 13 process.

This is a generally benign ordeal. However, if anything the Trustee or his or her staff tells you conflicts with anything your attorney has told you, discuss that with your bankruptcy attorney immediately.

It is important to keep in mind that the Trustee is not your attorney and cannot offer legal advice, though they certainly approach this red line with these orientation sessions. The Trustee is also not on your side. They are your legal adversaries in your Chapter 13 process.

When you exit the orientation—or if you did not need to attend one because you were assigned the Trustee who does not prefer them—your bankruptcy attorney will greet you and discuss the hearing to follow.

When you enter the 341 hearing room, you will again wait your turn for some time. With a Chapter 13, this can be a more extended period of time than in a Chapter 7 341. The Chapter 13 341 Meeting typically runs 10-15 minutes long—and can run significantly longer depending upon the case and the Trustee representative presiding over the meeting.

This attorney has witnessed one of the Chapter 13 Trustees’ staff attorneys grilling each and every debtor before her for 20-30 minutes each, forcing the docket to move hours behind schedule, on at least one occasion.

Do not tell your boss you will only be absent from work for an hour or two. Take the day off.

The Chapter 13 Trustees in Detroit all utilize a preliminary set of written, laminated stock questions that they expect your attorney to ask you before they start in with their own questioning.

Further, your attorney will have been provided with something called a “341 Status Sheet” via email prior to your 341, which will include one or fifty “comments” or questions that the Trustee’s staff had when reviewing your petition, schedules, and Chapter 13 plan.

They may be requests for clarification, outright points of confusion, or a foreshadowing of objections to your Plan confirmation yet to come—but it is expected that your attorney will also craft these Status Sheet comments into questions for you as well.

Once these are completed, the Chapter 13 Trustee, staff attorney, or paralegal presiding over the meeting will ask any other question about your filing, employment, marital status, or financial or asset situation that they deem necessary.

Again, you are required to respond under penalty of perjury.

Creditors are less likely to appear at a Chapter 13 341 than for a Chapter 7—but they do appear from time to time. This is particularly true if you have financed a vehicle loan through a credit union.

 

Where Is the 341 Meeting Held?

 

The address where the 341 Meeting will be held is located on the “Notice of Commencement” that you would have received directly from the Bankruptcy Court after filing the case.

In Detroit, both Chapter 7 and Chapter 13 341 Meetings are held in the 3^rd floor bankruptcy hearing area in the United States Bankruptcy Court located at 211 W. Street, downtown Detroit, at the corner of Fort and Washington.

Parking is available at any number of surface lots around the neighborhood or in the (somewhat pricey) parking garage directly across from 211 W. Fort on Washington.

 

Can I Adjourn My 341 Meeting?

 

No. Unless you’ve been hit by a truck. Attendance is mandatory, and, except in cases of serious emergency, cannot be adjourned or rescheduled.

Further, if you have filed a Chapter 13 bankruptcy, rescheduling the 341 Meeting can adversely impact the timing of later hearings and other important deadlines.

 

What about COVID?

 

As of this writing in February, 2021, all 341 Meetings are being held either virtually, via Zoom or other virtual meeting platform, or telephonically due to the COVID-19 pandemic.

This will persist until the Bankruptcy Court issues further orders directing that face-to-face appearances must resume.

Your bankruptcy attorney will advise you as to the procedure for your particular 341 Meeting of Creditors in the meantime.

IMPORTANT REMINDERS REGARDING REMOTE 341 MEETINGS

1.  Be sure to KEEP YOUR PHONE ON MUTE until your Trustee calls your case.
2.  Be sure to CALL FROM A QUIET PLACE as your Trustee must record the hearing.
3.  Do not call in from your car while driving as this is unsafe distracted driving and your Trustee will likely not conduct your hearing.
4.  Do not put your phone on hold as oftentimes music plays and disrupts the other hearings.
5.  Do not use a speakerphone or Bluetooth headset as the Trustees have difficulty hearing or recording the meetings.
6.  Speak in a clear, loud voice and answer the Trustee’s questions with precisely and succinctly.
7.  If your hearing is being held via Zoom, be sure that you name the device that you use to call in with your name and that you have enabled both the audio and the camera as your Trustee will want to see you.

 

The 341 Meeting of Creditors: The Bottom Line

• You must attend your .341 Meeting of Creditors
• You must bring your picture ID (Driver’s license) and Social Security card
• You will be sworn in and will testify as to your financial condition
• A Trustee, not a Judge will conduct the hearing and ask you questions regarding your income, expenses, assets and liabilities
• Very few creditors will attend
• The .341 Meeting of Creditors is not a Court hearing-the Judge will not preside over the hearing and no legal decisions will be made at the hearing

 

Despite all of this verbiage, the bottom line is that you should not worry in advance over your 341 Meeting of Creditors.

If you are working without a bankruptcy attorney, it will likely indeed be a confusing process, all the more frustrating because you very likely have not and will not produce documentation to the Trustees as required. Your 341 Meeting will almost surely be adjourned and continued a number of times while you fumble with paperwork.

If you are working with an experienced bankruptcy attorney, none of this should be true for you. You will enter your 341 Meeting with expert assistance at your side, answer a few questions that you already know the answers to, and leave again a few minutes later.

Attorney Walter Metzen has guided thousands of clients through the Chapter 7 and Chapter 13 bankruptcy process for over 30 years. A Board-Certified bankruptcy expert, Attorney Metzen will ensure that you are well-informed and well-represented at your 341 Meeting of Creditors.