The Bankruptcy Code requires a Meeting of Creditors in every Chapter 7 case. The Meeting of Creditors is nicknamed a “341 Meeting” because Section 341 of the Bankruptcy Code describes this meeting. Some people mistakenly believe that this meeting is held in a court room setting. This meeting is not held before a bankruptcy judge and in most cases is not held in a court house. The Chapter 7 trustee presides over this meeting. Creditors are invited but rarely attend this meeting. For the majority of these meetings the only people in attendance are the debtors, their attorneys and the Chapter 7 trustee. These meetings are open to the public, so anyone may attend them.
Debtors are required to attend this meeting. At the meeting, the debtors are required to prove their identity and they are required to prove the accuracy of their social security number. This is usually done by the individual debtor showing his or her driver’s license and social security card to the trustee. Then the trustee proceeds to ask the debtor a series of questions. The trustee’s main goal is to make sure that the statements and schedules that the debtor filed were accurate and to determine if the debtor has any non-exempt assets that the trustee would be entitled to take and sell for the benefit of the debtor’s creditors.
Even though the debtor’s attorney is present, the trustee will generally ask all the questions directly to the debtor. The attorney is there to ensure that the trustee’s questions are appropriate and sometimes the attorney may object to a trustee’s line of questioning in order to protect the debtor or the attorney may provide clarification on an issue. All debtors need to attend this meeting. If a debtor is unable to attend the meeting for an excellent reason, the debtor’s attorney can file a motion to reschedule the meeting. Most trustees and bankruptcy judges do not like to make a habit of rescheduling these meetings. The bottom line is if the debtor misses the meeting and wants to reschedule, the debtor had better have an excellent reason for doing so.
If a debtor misses the Meeting of Creditors and if the judge does not agree to reschedule the meeting, the case could then be dismissed. Often the Chapter 7 trustee will give the debtor a directive at this meeting. Usually a directive consists of a demand to turn over certain property for the trustee to sell or a demand to produce certain documents (such as copies of tax documents, bank statements or business documents). If the debtor fails to comply with the trustee’s requests it could result in the debtor losing his or her discharge.
The Bankruptcy court usually schedules a large number of these meetings for a trustee on any given day. It is not uncommon for a trustee to have eight meetings an hour for eight straight hours. Most meetings only last between five and ten minutes. This means that a trustee needs to be efficient with these meeting in order to stay on schedule. It is important that the debtor has all of the required documents out and ready for the trustee to examine the minute the case is called. Most trustees don’t have the time or patience to wait for a debtor to fumble through her purse looking for a driver’s license.
If the debtor’s case is complicated, the trustee may continue the meeting until a later date so that the trustee may have more time to question the debtor. After the trustee is done questioning the debtor, the trustee generally asks if there are any creditors with questions for the debtor. If a creditor does show up at the meeting, the trustee will usually allow the creditor to ask a reasonable number of questions of the debtor. Once again, most creditors do not attend this meeting.