The Meeting of Creditors in Chapter 7 Bankruptcy

By Rebecca McDowell, Contributing Author

Every Chapter 7 bankruptcy is administered by a Chapter 7 trustee. The trustee's main task is to sell nonexempt property to repay general unsecured creditors. The trustee also looks for bankruptcy fraud, makes sure your paperwork is accurate, and conducts an  investigation into your property and your finances. The trustee does much of this fact finding in the meeting of creditors (sometimes called the 341 hearing). If you file for Chapter 7 bankruptcy, you must attend the meeting of creditors.

The meeting of creditors is so named because your creditors may also appear and ask you questions, although most won't

Timing and Location of the Meeting of Creditors

In a Chapter 7 case, the 341 meeting will be set for at least 21 days but no more than 40 days after the day you file your case. The hearing will be in a meeting room, often in a federal building, but not usually in a courtroom. There will not be a judge at the 341 meeting; the meeting is conducted by your Chapter 7 trustee.

The Trustee Will Review Your Case Before the 341 Hearing

The trustee's investigation begins as soon as you file your case, and the trustee will review your bankruptcy paperwork before your 341 meeting. The trustee will review all your debts, income, and expenses, as well as your Statement of Financial Affairs, which provides a brief history of your major financial transactions. The trustee will also review your previous federal tax returns and your pay stubs.

What to Bring to the Meeting of Creditors

You must bring photo identification and proof of your Social Security number to the meeting. The the trustee will not conduct the meeting if you do not have these items, so if you forget them or do not have them, you will have to return at a later date for a rescheduled meeting.

Your Chapter 7 trustee may have his or her own individual requirements about what you must bring to the meeting. The trustee will notify your attorney about what you must bring to the meeting; if you do not have an attorney, the trustee will notify you directly. Typical documents a Chapter 7 trustee may require you to bring to your 341 meeting include:

• copies of recorded mortgage documents

• car titles

• property deeds

• bank statements

• tax returns, and

• pay stubs.  

If you do not bring these other required items, the trustee will either move your meeting to a later date or require you to submit them by a certain date to avoid coming back.

What to Expect at Your Chapter 7 Meeting of Creditors

When the Chapter 7 trustee calls your case, you will sit at a table with your attorney so the trustee can question you. If any of your creditors or their attorneys are in attendance, they will sit at the table with you. Your trustee will question you first.  

The trustee must determine if you have any nonexempt property he or she can sell, or if you have made any payments to creditors or transferred any money or property before your bankruptcy that he or she can get back. The trustee acts on behalf of your unsecured creditors, and he or she will want to make sure that your schedules provide accurate information about how much your property is worth. The 341 meeting is the trustee's opportunity to ask you about information in your paperwork, such as property values and past financial transactions.

The trustee's questions will vary depending on the local rules of your bankruptcy court and the trustee's own custom. Typical topics of questioning include:

• why you are filing bankruptcy

• whether you have listed all your property in your schedules and whether you have listed accurate values

• whether you have repaid any of your creditors within the three months prior to your bankruptcy

• whether you have repaid any relatives or close friends in the last year

• whether you have sold or given away any property or transferred any money in the past several years

• whether you own or have ever owned a business

• how you determined the value of your property listed in your paperwork

• whether your income is accurate in your schedules and on your means test

• whether you have dependents

• whether you are married, divorced, separated, or single

• whether you owe child support, alimony, or any other domestic support, and

• whether your monthly expenses are necessary and reasonable.

If the trustee has no further questions and there are no creditors present, the trustee will conclude the meeting. If there are creditors present, the trustee will allow them to ask you questions

Questioning by Your Creditors

In a typical Chapter 7 case, the only creditors that appear are those to whom you owe money for your house or your car. These creditors may ask you if you intend to keep the property and ask you questions about the condition of the property. For example, your car lender may send an attorney to find out if you plan to keep your car, to find out the condition of the car, and to have you sign an agreement to keep the car and repay the loan.

Other creditors may appear to investigate whether your Chapter 7 case is filed in good faith or to find out if you intend to repay them. If you used your credit cards right before you filed, for example, your credit card company may send an attorney to ask you about the charges.

Ending the Meeting and Follow-Up

Once the trustee and creditors have finished asking you questions, the trustee will conclude the meeting. The trustee may continue the hearing at a later date if:

• the trustee needs more information

• you were missing documents, or  

• the trustee requests that you amend your paperwork