What is a 341 Hearing?
What is a 341 Hearing?
What is a 341 Bankruptcy Hearing (Creditor’s Meeting)?
A bankruptcy case involves a lot of different forms, paperwork, and procedures. People who are thinking of filing for bankruptcy or have done their research about it will have heard of the 341 bankruptcy hearing, also known as the creditor’s meeting.
A 341 bankruptcy hearing is a mandatory step in a bankruptcy case. It’s worth it to be aware of what it is, the basics of how it works, how to prepare for it, and what can be expected. This is so that anyone going through bankruptcy is prepared and can complete the creditor’s meeting smoothly and successfully.
What is a 341 Bankruptcy Hearing?
A 341 bankruptcy hearing, despite its name, is not actually a hearing that is conducted in court in front of a judge. It’s an informal creditor’s meeting that is administered by the appointed bankruptcy trustee. This meeting is mandatory in every bankruptcy case, whether it is filed under Chapter 7, 13, or 11.
Purpose of the 341 Bankruptcy Hearing
In a 341 hearing, the participants include the appointed trustee, the person filing for bankruptcy (the debtor), and the creditors. It’s the avenue where the creditors and the trustee are given the opportunity to task the debtor about their assets and debts.
The trustee, a private attorney experienced in bankruptcy, uses the 341 hearing to clarify the information that the debtor provided in the forms and ensure that there are no errors, misrepresentations, fraud, etc.
When and Where the 341 Bankruptcy Hearing Takes Place
As soon as the debtor files their bankruptcy case, they are scheduled for a 341 bankruptcy hearing 30 to 45 days from the filing date. The debtor will be informed about the location, date, and time of the meeting in the form of a written notice from the court. The notice will also be provided to the creditors and bankruptcy attorney, if the debtor has engaged one.
Because of the COVID-19 pandemic and the quarantine regulations, the 341 bankruptcy hearing is currently held via Zoom video conference or by phone. But usually, it takes place in a meeting room at the local bankruptcy court.
How to Prepare for a 341 Bankruptcy Hearing
The 341 bankruptcy hearing is a very informal meeting, so it’s not something that a debtor should feel stressed or nervous about. However, it’s still worth preparing for it beforehand. The most important thing to remember is that the debtor should bring a copy of their petition and schedules, i.e. the documents they filed with their bankruptcy case.
Having these documents on hand will ensure that the debtor can answer the questions of the trustee and the creditors, especially those that pertain to a listed asset. The debtor should be able to refer to the petition and schedules to answer the questions of the trustee.
In some cases, the trustee would ask for additional supporting documents to clarify certain information in the bankruptcy petition. Some common supporting documents or identification records that can be asked include, but are not limited to:
- Driver’s License
- Social Security Card
- Social Security Number
- Tax Returns
- Bank Statements
- Real Estate Statements
- Insurance Statements
- Other proofs of identity and financial documents
The debtor and their lawyer must make sure to submit these documents early and give the trustee plenty of time to review them. Otherwise, they risk having their 341 bankruptcy hearing moved and their case delayed. If the debtor does not comply, the trustee can ask the court to dismiss their bankruptcy case on the grounds of noncompliance. The debtor is obligated to comply with the requests of the trustee assigned to their case. The dismissal may also carry a bar on refiling.
Another important thing to note, because 341 bankruptcy hearings are currently being held digitally, the debtor should allocate the time to focus exclusively on their meeting. They should not be driving anywhere or have other obligations. Most importantly, the debtor must find a quiet area to attend the Zoom conference meeting or phone call.
Also, the debtor should be respectful of the trustee’s time. The trustee may have other bankruptcy cases to deal with and 341 hearings to attend, so it’s important that the debtor arrives ahead of time and doesn’t keep the trustee waiting. If the debtor shows up late, the trustee may reschedule the meeting or ask the court to dismiss the case.
If a 341 meeting is rescheduled for any reason, the new date will depend on the trustee’s schedule. Sometimes, it can be 30 days from the initial 341 hearing date.
What are Some of the Questions Asked in a 341 Bankruptcy Meeting?
At the beginning of the 341 bankruptcy meeting, the trustee will ask the debtor to state their name and will put them under oath, where they would have to swear under the penalty of perjury that everything the debtor discloses is truthful.
Even if the meeting is informal, it’s important that the debtor provides all the information and answers everything as truthfully and correctly as they can. Any lying or falsifying of information in a bankruptcy case is a federal crime, so the trustee can refer the case to the FBI for investigation.
Generally, the 341 hearing is going to be quick, as long as everything looks correct in the petition and schedules. The meeting can be delayed if the case is highly complex or there are things that don’t align in the petition.
Some of the questions that the trustee will ask the debtor include:
- Is the address that you listed your current address?
- Did you read and sign the petition and everything that you filed with the court?
- Are you familiar with the information contained in the documents?
- Is the information true and correct?
- Are there any errors or omissions?
- Do you need to make any changes to anything?
- Did you list all of your creditors?
- Have you ever filed bankruptcy before?
- Are the tax returns you provided true and correct?
- Do you have domestic support obligations
One common concern that bankruptcy debtors have is what type of information they need to change and disclose. Generally, no updates or changes need to be made because the trustee is asking questions that refer to the time when the case was filed. If there have been changes after the date of filing, there’s no obligation on the debtor’s part to go back and keep updating information as their expenses or income changes.
However, there can be some exceptions to the general rule, such as if the debtor receives a tax refund that they should have listed as a potential asset or if they inherit something within several months after filing for bankruptcy.
The creditor’s meeting will usually last a few minutes, but if there is anything that is improperly represented or the trustee needs further information about something, they may ask for additional supporting documents and reschedule the meeting.
In most instances after the debtor provides the supporting information, the trustee will cancel the rescheduled meeting because they already have the documents and information they need to decide what to do with the case.
The Green Sheet
Most trustees have a separate form that they will require the debtor to fill out and sign ahead of the 341 bankruptcy hearing. Some also provide the debtor with an informational brochure about bankruptcy, called in some areas as the green sheet, which the debtor can take a look at and read through.
The green sheet, which comprises two pages, would include and answer basic information such as:
- What is bankruptcy?
- What are the different types of bankruptcy?
- What is a discharge?
The trustee will ask the debtor to make sure that they have read through it so that they understand the requirements of bankruptcy. This can be helpful for those who don’t have attorneys. But for those who have hired a bankruptcy lawyer, these are typically things that they have discussed with their attorneys before filing their cases.
What Happens After a 341 Bankruptcy Hearing?
After the 341 bankruptcy hearing, the trustee makes a decision about what to do with the case. They can dismiss it or if a Chapter 7 was filed, recommend to transition to a Chapter 13 where the debtor will be bound by a payment plan instead of the discharge of their debts.
The trustee files the decision to the court, informing the latter that the 341 hearing has concluded. For Chapter 7 cases, a 60-day waiting period will commence before the debtor receives their discharge. The court will issue the discharge and mail it to the debtor’s address.
After the 341 hearing, the debtor needs to make sure that they have taken the second course in bankruptcy, which is the personal financial management course. Although this can be done anytime after the bankruptcy case is filed, it’s recommended to take care of it shortly after the 341 hearing.
If the case is a Chapter 13 bankruptcy, the debtor would have to attend a confirmation hearing before a judge to see if the payment plan recommended by the trustee will be confirmed. The debtor may also be asked to provide additional documentation or in some instances, the first payment under the plan.
A Final Word
Although the 341 bankruptcy hearing is informal in nature, it doesn’t mean that it should be taken for granted. The debtor should still take it seriously and make sure that they comply with the procedure and the requests of the trustee. Preparing for a 341 hearing can help a debtor’s bankruptcy case run more smoothly and prevent rescheduling or the dismissal of their case.