In my Bankruptcy Alphabet, F is for First meeting of creditors.
Lots of rumors exist about the first meeting; it garners a level of notoriety that it cannot sustain on closer look. Let’s check it out.
The first meeting of creditors 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.
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 first meeting of creditors 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.
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 five 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 first meeting of creditors is a piece of cake.
If you’d like to read more about F in bankruptcy, try Jay’s exposition on F as for Future Flow Agreements. Gotta be really stuck on F for that<g>.
This piece was brought to you by the letter F.
Image courtesy of milesopie.
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