The Bankruptcy Hearing: the Meeting of Creditors
This article discusses the Meeting of Creditors Hearing in bankruptcy cases. For more information, you may also want to view this video about the hearing, which was produced by the Administrative Office of the United States Courts.
In every bankruptcy proceeding, the debtor must attend a hearing called the “Meeting of Creditors” and submit to an examination under oath. The hearing is sometimes also called the “341 Hearing” because it is required by Section 341 of the Bankruptcy Code.
In most bankruptcy cases, the Meeting of Creditors hearing is the only formal proceeding that you must go through. The Meeting of Creditors acts as an information-gathering session. It is an opportunity for the bankruptcy case trustee and creditors to meet with you, face to face, and ask you questions about your financial affairs, your assets and your debts, and any other matter that might affect your bankruptcy proceeding.
- PREPARING FOR THE HEARING
The time and date of the Meeting of Creditors hearing is usually set automatically when your bankruptcy case is filed with the Court. Within a few days after your case is filed, the Court will mail you a formal notice of the date and time of your hearing. The hearing is usually scheduled on a date about a month after your case is filed.
You are required to attend and complete the hearing. If a married couple has filed a joint bankruptcy case, both spouses must attend the hearing. If you fail to attend the hearing, the bankruptcy trustee may seek a dismissal of the bankruptcy case. However, as discussed below, there are a few situations when you may be allowed to participate in the hearing by telephone or when the hearing could be rescheduled.
- WHAT TO BRING TO THE HEARING
You are required to bring several items with you to the Meeting. First and foremost, you must bring identification documents, including:
- Government issued photo identification, such as your driver’s license or passport; and
- Proof of your Social Security number, such as a Social Security Card, or other government issued documentation.
Next, you should bring copies of certain financial documents, such as your most recent paystub, accounts statements from all of your bank accounts covering the filing date, etc. Your attorney should provide you with a list of what documents you will need to bring with you. Finally, you should bring your copy of all of your bankruptcy paperwork.
- REVIEW YOUR BANKRUPTCY PAPERWORK BEFORE THE HEARING
During the Meeting of Creditors, the trustee and your creditors will ask you questions about the information in your bankruptcy petition and other paperwork. Prior to the hearing, you should review all of your bankruptcy paperwork to refresh your memory about the information contained in the paperwork. Also, you should make sure there are no errors in the paperwork. If you notice mistakes or errors in the bankruptcy paperwork, you should immediately inform your bankruptcy attorney, who will inform the trustee. You may be required to file a set of amended bankruptcy paperwork to correct the mistake.
- DURING THE HEARING
The Meeting of Creditors is conducted by the bankruptcy case trustee assigned to your case. The Meeting is a conference between you (and your attorney) and the trustee. Your creditors are also entitled to attend and participate; however, in most cases, no creditors attend the Meeting. The Meeting is open to the public and multiple hearings are scheduled during each session, so there may be other debtors, attorneys, and creditors who will be present during your hearing while they are waiting for their hearings to begin. Bankruptcy judges are prohibited from attending the Meeting.
At the start of the hearing, the trustee will place you under oath. So, all of your answers are considered sworn statements and are made under the penalties of perjury.
In most hearings, the trustee asks a series of questions about your financial circumstances, including the information in your bankruptcy petition and other paperwork. The hearing is a fact-finding session and the trustee’s questions are usually brief and routine. In some cases, the trustee requires more information or documentation than was available at the hearing. In that situation, the trustee may continue the hearing to a later date to give you and your attorney additional time to submit that information.
In all types of bankruptcies, the trustee’s role is to verify the accuracy of the information in your bankruptcy petition and other paperwork. However, depending on the kind of bankruptcy you file, the trustee plays additional roles as well.
In a Chapter 7 bankruptcy, the trustee is charged with liquidating your non-exempt assets to create a pool of funds to pay your creditors. As a result, the Chapter 7 trustee is largely concerned about the nature and value of your assets.
In a Chapter 13 bankruptcy, the trustee is charged with administration of your proposed Chapter 13 payment plan. The trustee must ensure that you dedicate all of your disposable income to your repayment plan. So, the trustee will be most interested in your income and expenses and various aspects of your proposed plan. The trustee must consider whether you appear financially able to make the proposed payments and whether your payments should be larger than you have proposed. During the hearing, the trustee will typically talk with you and your attorney about potential problems with your proposed payment plan in an effort to resolve those problems prior to the confirmation hearing, which is the next step in a Chapter 13 case.
Once the trustee has finished asking you questions, the trustee will allow any creditors that are present to ask you questions as well. After the creditor’s questions, the trustee will conclude your hearing. Or, the trustee may continue your hearing to a later date for you to provide additional information or documents.
- AFTER THE HEARING
Once the trustee concludes your Meeting of Creditors, your creditors and the trustee have 60 days to file objections to your case. If no objections are filed, your case moves on to the next stage of the bankruptcy proceeding.
In a Chapter 7 bankruptcy, after expiration of the 60-day period, the Bankruptcy Court will issue an order discharging your debts. If the Chapter 7 trustee is not liquidating any of your assets, your case will close at the same time. However, if the trustee is liquidating an of your assets, then your case will remain open for several more months while the trustee completes the process of liquidating your assets, making distributions to your creditors, and filing an accounting with the Court.
In a Chapter 13 bankruptcy, your case moves towards the Confirmation Hearing. The purpose of the Confirmation Hearing is for the bankruptcy judge to determine whether your proposed bankruptcy plan meets the standards for approval provided by the Bankruptcy Code and either confirm or deny the plan.
- OTHER ISSUES:
- INTERPRETER / DISABILITY ACCOMMODATIONS
If you will need an interpreter or certain disability accommodations to complete the Meeting of Creditors hearing, you should notify your attorney immediately. For interpreters, the United States Trustee will provide an interpreter, usually by telephone. The interpreter will translate the trustee’s questions and your answers so that the hearing can be completed. Disabled accommodations will vary depending on the nature and extent of your disability.
- WHAT IF I CANNOT ATTEND MY MEETING OF CREDITORS?
It is critical that you attend your Meeting of Creditors. As mentioned above, if you fail to attend, the bankruptcy trustee will normally seek dismissal of your case.
In very few cases, you may be able to either reschedule your hearing or arrange to appear at your hearing by telephone or video conference. Reasons include medical emergencies, natural disasters, your incarceration, active military service, or other compelling circumstances. Ordinarily, the following circumstances will not justify rescheduling the hearing: your work schedule or business or personal travel plans, routine medical procedures and your failure to receive notice of the time and date of the hearing.
If you believe you have a valid reason to reschedule your hearing or a valid reason to appear at your hearing by telephone or video conference, you must immediately notify your attorney so the attorney can notify the trustee.
If you have more questions about your bankruptcy and the Meeting of Creditors hearing, you should contact your local bankruptcy attorney to discuss your concerns.