In my Bankruptcy Alphabet, F is for First meeting of creditors.
Lots of rumors exist about the that meeting; it produces unwarranted anxiety that is avoidable if you understand what’s up. Let’s check it out.
The first meeting of creditors, also called the 341 meeting, is often the only time a debtor has to appear in public in connection with their bankruptcy case. It’s as close as most filers get to “going to court”.
But it’s hardly “court”, as the trustee in the case presides. Most of those filing bankruptcy never even see a bankruptcy judge or a courtroom.
You’d think from the title, first meeting of creditors, that there would be further meetings. Not so. Usually, once the first meeting is concluded, there are no further meetings.
It’s called a “meeting of creditors“, though creditors seldom come.
Certainly the large institutional creditors don’t come. Not going to see Citibank, Chase, or Bank of America there.
The meeting is really between the debtor and the trustee in the case.
Watch a simulated 341 meeting
The trustee is tasked to ask some standardized questions and to gather information about any assets that might be available to pay the claims of creditors. In the vast majority of cases, the debtor’s bankruptcy exemptions protect everything he owns.
Where I practice in Silicon Valley, the most difficult thing about the hearing is getting into the building where it’s held. Produce ID, take off your shoes, empty your pockets: for all that fuss, you’d think we’d get a plane flight somewhere. It’s become easier when these meetings shifted to Zoom.
ID is important however. The most frequent reason for requiring the debtor to come back a second time to meet with the trustee is failure to bring current, government-issued picture identification to the meeting.
I haven’t mentioned that the first meeting of creditors has an alias: it’s also known as the 341 meeting, since that’s the section of the Bankruptcy Code that requires that the debtor be examined about his petition and schedules under oath.
I have simple rules for testifying at the 341 meeting.
Master those simple rules and you are good to go. If you have taken care with supplying information for your bankruptcy papers, the meeting of creditors is a piece of cake.
This piece was brought to you by the letter F.
Image courtesy of milesopie.
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