One of the most commonly asked questions asked about bankruptcy is “Will I have to go to court?” In most bankruptcy cases, the answer is no. However, you will have to attend a hearing conducted by the bankruptcy trustee called the “meeting of creditors”. The primary purpose of this hearing is to give the bankruptcy trustee the opportunity to ask questions and have you confirm under oath the information you provided in your petition, schedules, and other documents. Knowing what to expect at this hearing will make things go smoother and help to ease any anxiety you may be feeling.
Generally, the only people attending the meeting are the trustee, your attorney, and you. Many people are concerned that their creditors will come to this hearing and grill them. Although creditors can attend the meeting and ask questions, it is very unusual for creditors to show up at all. It is simply a waste of their time. On the rare occasion when a creditor does turn up, your attorney can make sure they do nothing inappropriate. Occasionally, a representative of the United States Trustee (the supervisor of the trustee program) will attend and ask questions. You should answer his or her questions in the same manner you would answer the bankruptcy trustee.
For Chapter 7 and Chapter 13 cases filed in Philadelphia, Montgomery County, and Delaware County in Pennsylvania, the meetings are held in Philadelphia. The setting is an office with you and your attorney sitting across a desk or table from the trustee. In most cases, this meeting is relatively short (often less than 15 minutes). However, you may have to wait a while before your case is called.
The creditors meeting is generally less formal than a hearing held before a judge. You should dress neatly, but you do not need to wear a suit and tie.
Bankruptcy Note: Attorneys also use the term “341 hearing”, which refers to the section of the Bankruptcy Code establishing the meeting of creditors (§ 341(a)).
At the beginning of the meeting, the trustee will ask to see your driver’s license and Social Security card and swear you in. (You should have your Social Security card and driver’s license out and ready when you go in to see the trustee.) He or she will then ask you a series of questions related to the information that you provided in your petition, schedules, and other documents. For a list of common questions, click here.
It is very important to understand that the trustee will never try to trick you or trip you up. Please keep in mind that just because you are asked a certain question does not mean that anything is wrong. If, for example, the the trustee asks you if the amount that you listed for your salary is accurate, it is not an indication that the trustee thinks you are not telling the truth. Most often, the purpose of the question is just to confirm information for the record. Remember, your bankruptcy lawyer will be there to assist you if you do not understand a question. Of course, if anything is inaccurate or has changed, you need to tell your attorney ahead of time.
In addition to asking questions, the trustee may request certain documents, if they have not been provided in advance, including:
1. Your most recent pay stub.
2. Bank, retirement, and other financial statements showing the date of filing.
3. Documents showing mortgage and auto loan balances as of the date of filing.
4. Valuations of your real property and vehicles.
5. Proof of current insurance for real property and vehicles.
6. Your most recent federal tax form (always provided to the trustee at least a week before the meeting).
You will have provided these documents to your attorney well before the hearing. However, make sure your attorney knows if there are updates or changes to any of these documents. If the trustee requests any additional information or documents, it is important that you get it to your attorney as soon as possible.
That is the entire 341 hearing in a nutshell. In most cases the trustee will simply wish you luck and the meeting is adjourned.
If you have not completed the Financial Management/Debtor Education course (the second course) by this point, you should do so as soon as possible. It must be filed within 60 days of the first scheduled date for the meeting of creditors.
In a Chapter 7 case, unless the trustee requests additional information, you will not have to do anything else after the hearing. The trustee will send a report to the judge recommending discharge. About three months after the judge receives this report, the judge will sign your order of discharge and close the case. At that point, your case is complete.
In a Chapter 13 case, the bankruptcy judge in your case will hold a second hearing called a “confirmation hearing” sometime later in the process to determine if your Chapter 13 plan should be approved. However, you generally do not have to attend the confirmation hearing. Typically, if the trustee recommends approval, the plan will be approved. It is common for the trustee to request changes to the Chapter 13 plan at or after the meeting of creditors (e.g., to take into account a claim made by a creditor or pending changes in the debtor’s income and expenses.). Once these changes have been made or an agreement reached, the trustee will recommend to the judge that your proposed Chapter 13 plan be confirmed.
The meeting of creditors is nothing to fear, but a little preparation will help to ensure that your case is approved without delay.