Every bankruptcy debtor must go to court in their bankruptcy case.
It’s usually the first and only time that your personal appearance is required.
The meeting is nicknamed the “341 meeting” from the section of the Bankruptcy Code that requires it.
What’s the point of going to court
The first meeting of creditors has two basic purposes: to have the debtor validate the information in the bankruptcy papers under oath, and to provide the trustee any information needed to determine exemptions or administer any non exempt assets.
It’s also an opportunity for creditors, who are likely to take a financial hit in your bankruptcy case, to ask questions of the debtor. Those questions must be limited to inquiries about assets and about debts.
Where I practice in the Northern District of California, post-pandemic 341 meetings continue to be conducted by phone or by video conference. Cheers to our judges who have thereby reduced the time debtors have to take off work, and the time attorneys spend traveling to court.
How does the first meeting of creditors work
The trustee, not a judge, conducts the meeting and leads the questioning. Creditors are invited but seldom attend.
The meeting is not a test or an inquisition. Its focus is on validating and perhaps expanding on the information in the bankruptcy papers.
If you genuinely don’t know the answer or don’t understand the question, it’s OK. Just say so. The trustee will adapt by rephrasing the question or asking that you supply supporting information.
Usually, each debtor’s testimony is concluded in a few minutes.
Rules for testifying
Here are my rules for an appearance in court:
- Tell the truth
- Listen to the question……. all the way to the end.
- Answer in as few words as possible
- Don’t explain, expand, justify, or speculate unless asked
- If your attorney starts talking, you stop talking
While I have seldom had clients blow a case at the 341 meeting, they can certainly either prolong the meeting or confuse the trustee or the issues by babbling.
So, start by listening, carefully, to the question.
Bring your identification; be familiar with the information in the schedules; and answer questions in short sentences and all will be well at your first (and probably last) meeting of creditors.
About the 341 meeting.