What To Expect at the 341(a) Meeting of Creditors
by Brett Bodie
In any consumer bankruptcy case (Chapter 7 or Chapter 13), every Debtor is required to attend a Meeting of Creditors (aka the “341 Meeting” – the name comes from 11 USC §341 which lays out the requirement for the meeting). Federal Rules of Bankruptcy Procedure 2003 mandates that the 341 Meeting must occur no earlier than 21 days after the case was filed and no later than 40 days after the case was filed. The 341 Meeting will be in a location assigned by the region in which the bankruptcy case is filed. For example, here in Encino we are part of the US Bankruptcy Court for the Central District of California. The Central District stretches all the way from San Luis Obispo through Santa Barbra and Los Angeles and down into Orange County. In the Central District of California there are five different 341 Meeting locations:
- Santa Barbara – 128 E. Carillo St. Santa Barbara, Ca 93101
- San Fernando Valley (Woodland Hills) – 21051 Warner Center Lane Rm 105 Woodland Hills, Ca 91367
- Los Angeles – 725 S. Figueroa St. Los Angeles, Ca 90017
- Santa Ana – 411 W. Fourth Street Santa Ana, CA 92701
- Riverside – 3801 University Avenue Riverside, CA 92501
All creditors listed in the bankruptcy paperwork will receive notice of the 341 Meeting date, time and location. Although creditors are allowed to be present they very rarely are. In the vast majority of bankruptcy cases, there is no benefit to the Creditors by appearing at the 341 Meeting. About 94% of all Chapter 7 cases are “no asset” cases (cases where there is no un-exempt property that will be taken to pay creditors). If there's nothing to be sold and no money coming, creditors are unlikely to waste the time and expense of appearing at a 341 Meeting.
The 341 Meeting is conducted by a panel trustee. The United States Trustee's Office oversees administration of all bankruptcy cases. Included in that job is appointing local panel trustees to oversee bankruptcy cases. This may sound confusing but it's an important distinction. The panel trustee who administers a Debtor's Chapter 7 or Chapter 13 bankruptcy case is not a governmental employee. They are a private fiduciary appointed by a government agency and they have a fiduciary duty to the bankruptcy estate but they are not part of the government. They are also not a judge, so Debtors should not address the Trustee as “your honor.”
The purpose of the 341 Meeting is to allow the Trustee overseeing the case to perform an investigation into the Debtor's finances and ask the Debtor questions to ensure the case complies with code provisions and can be administered. The 341 Meeting acts like a filter for the Trustee. It allows Trustees to efficiently weed through the vast majority of cases with no significant issues and instead focus on the few that have assets to administer or other issues to address. The Trustee has a duty to oppose the Debtor's discharge in rare scenarios. Most objections to discharge, however, will come from the United States Trustee's Office, not the presiding panel trustee.
The 341 Meetings are held at specific dates and times. The Trustee will have a “calendar” that normally covers one hour. During that calendar they will have many cases scheduled and will call them one at a time. Most Trustees will begin the 341 Meeting with a short statement about their role, what to expect and they will discuss any fliers or questionnaires that Debtors must complete (each local office has their own specific rules when it comes to required fliers to read or questionnaires to fill out). When the Trustee calls a case, they will normally begin by inspecting the identification of the Debtor. It is imperative that the Debtor has a government issued photo identification and acceptable proof of social security number with them at the 341 Meeting. Without it, the Trustee cannot conclude the meeting and the Debtor will have to return anohter time.
After the identification check, the Trustee will go on to ask a set of questions of the Debtor. Each Trustee has their own way of phrasing the questions they will ask at the 341 Meeting and many have unique questions they ask aside from the “standard” questions almost all Trustees ask. An example of the “standard” questions asked at almost every 341 Meeting is:
- Did you sign the petition, schedules, statements, and related documents and is the signature your own?
- Did you read and understand the petition, schedules, statements and related documents before you signed them?
- Are you personally familiar with the information contained in the petition, schedules, statements and related documents?
- To the best of your knowledge, is the informaton contained in them true and correct?
- Are there any errors, omissions or changes to bring to my attention at this time?
- Have you listed all of your assets on the schedules? If you are married (and in a community property state like we are here in California) have you listed all of your spouse's assets that you have an interest in?
- Have you listed all of your creditors on the schedules?
- Have you ever filed for bankruptcy before? If the answer is yes, the Trustee wil usually ask to verify the type of case (What Chapter), the location where it was filed, the year it was filed, and whether there was a discharge.
- Do you have a domestic support obligation such a schild or spousal support? If the answer is yes, the Trustee will require the address of the claimant.
- Have you read the Bankruptcy Information Sheet provided by the US Trustee?
- Have you made any transfers of any prpoerty or given any property away within the last two year period?
- Do you have any lawsuits pending against anyone where you expect to receive money for any reaoson?
There are many other questions a panel Trustee may ask but these are a basic version of the “standard” ones to expect in any case. In a Chapter 13 case, the 341 Meeting is usually used by the Chapter 13 Trustee to also verify and scrutinize a Debtor's budget to see if there is additional funds available to pay to creditors. In that type of meeting, the Trustee often will ask very specific questions about the Debtor's monthly income and expenses.
A Debtor's attorney will be present at the 341 Meeting and will help facilitate the questions and should be able to correct any inconsistencies or errors in the Debtor's testimony. Issues often arise that can create unneccesary continuances or other complications is the attorney is not able to clarify and explain them. It is extraordinarily important that the attorney who appears at the meeting is personally familiar with the information in the Debtor's bankruptcy case. An attorney is a useless empty suit if they cannot clarify, correct and explain complex issues in the Debtor's case. Judge Alan Jaroslovsky wrote an excellent article on the importance of having an attorney who is personally familiar withe Debtor's bankruptcy case present at the 341 meeting.
Toward the end of the meeting, the Trustee will ask if there are any creditors present. If a creditor is present, they will come up to the table and be allowed time to ask questions. Although the bankruptcy code provides a broad scope for the 341 Meeting, many local jurisdictions restrict the questioning at the 341 Meeting to questions regarding the nature and location of assets. If the Trustee, a creditor, or other interested party wishes to conduct a more thorough deposition of the Debtor, they can request a Rule 2004 examination which will be scheduled for a later date.
After the Trustee has asked all questions and received sufficient answers, they will either conclude the meeting (the vast majority of the time this is the ending) or continue it if there is additional information or documentation needed.
For most Chapter 7 Debtors, the 341 Meeting is a bit of waiting to go up to a table and answer 10-15 straightforward questions and then it's over and the meeting is behind them. Approximately 60 days after the 341 Meeting the Debtor will be eligible for discharge.