Tips for the Chapter 7 Meeting of Creditors Hearing

The Trustee

Your Meeting of Creditors, also called the 341(a) Hearing, you and your attorney will be meeting with the Chapter 7 trustee assigned to your case. The Chapter 7 trustees have two main jobs: 1) ensure the accuracy of the information you’ve provided; and 2) make a determination if there is any property that can be used to pay a dividend to creditors.
On this first point, accuracy of disclosures, the trustees will be asking you questions to verify the information you’ve provided. Pursuant to their duties and the requirements of the US Trustee (the government agency that oversees bankruptcy), the trustee is required to ask the following questions:

State your name
(Verify identity and Social Security number)
Did you sign the petition, schedules, statements, and related documents and is the signature your own? Did you read the petition, schedules, statements, and related documents before you signed them?
Are you personally familiar with the information contained in the petition, schedules, statements and related documents? To the best of your knowledge, is the information contained in the petition, schedules, statements, and related documents true and correct? Are there any errors or omissions to bring to my attention at this time?
Are all of your assets identified on the schedules? Have you listed all of your creditors on the schedules?
Have you previously filed bankruptcy? (If so, the trustee must obtain the case number and the discharge information to determine the debtor(s) discharge eligibility.)
What is the address of your current employer?
Is the copy of the tax return you provided a true copy of the most recent tax return you filed?
Is the copy of the tax return you provided a true copy of the most recent tax return you filed?
Have you read the Bankruptcy Information Sheet provided by the United States Trustee?

In addition to these questions, the trustee has free range to ask you questions that might be relevant to your financial situation.
The trustee’s primary role in the bankruptcy is to act on behalf of the creditors and investigate your financial situation to determine whether you have any property that can be liquidated for the benefit of creditors. For most Chapter 7 cases, we are able to protect your property by using the various exemptions that you entitled to. However, if these exemptions are not sufficient to cover your property, we may look to do some pre-filing exemption planning to ensure that you are protecting as much of your property as possible. If the exemptions are not sufficient to protect all of your property, there is a risk that the trustee might take an interest in your case and seek to recover this property.
Since the trustee is just another party to the case and the judge is not present at the hearing, nothing “bad” can happen at this hearing. Your case cannot be dismissed, you cannot be forced to turn over property, etc. However, this hearing is usually will you find out which direction your case is headed in. If it’s going to be a “no asset” case where you keep all of your property, it is likely that the trustee will conclude the hearing and put you on track to receive your discharge within 60 – 70 days. Sometimes facts will come out that might require that you make simple amendments to the petition. In some cases, the trustee will bring up issues about property that they might have an interest in liquidating to pay some of your debts.

Creditors

Despite the name “Meeting of Creditors” it is actually rare that any creditors show up. Since most creditors will receive nothing in a Chapter 7 case, they are not inclined to hire an attorney to represent them for a debt that will be wiped out. For usual debts like credit card and medical bills, you can be pretty certain that no one will show up. However, for other more unusual debts like those owing to a former spouse, business partner, or someone who you’ve been in litigation with, you might expect them to make an appearance at the hearing. The scope of questions they are allowed is very broad, but the trustee will often cut them off if they seem to be on a “fishing expedition”. Creditors can sometimes treat this as an opportunity to get a free deposition, but if they are cut off at the hearing then they would need to file a motion to conduct another separate hearing called a Rule 2004 Hearing.
Again, this hearing is usually just you, your attorney, and the trustee. Most of the trustees are relatively friendly and will treat you kindly and not try to make you feel bad about your situation. In a case where the trustee does not take in any money or property, their compensation is only $60, so they are not inclined to spend much time on these cases.

Continuances

Often the trustee will want more information or documents, so they will continue the hearing out to a later date so that these things can be provided. If we are able to timely get these things to the trustee, then it is most likely that you won’t need to show up to this continued hearing unless the trustee has more questions that they would like to ask “on the record”.
Another more common reason for a continuance is for the opportunity to make amendments to your bankruptcy documents. If this happens, we will work with you to make sure that these amendments are filed so that we don’t need to show up for another hearing.

Helpful Tips

Review your bankruptcy documents prior to the hearing. We will review your case with you prior to the hearing, but it is also good to have in front of you what the trustee is also looking at.
Answer truthfully – Failure to be truthful can subject you to a whole host of repercussions such as denial/revocation of your discharge, dismissal of your case, denial of exemptions, or even criminal penalties.
Answer the questions directly and provide any relevant information to clarify your responses. If the trustee is not satisfied with your answer, they can follow up, but you do not need to do their job for them.
If you don’t understand a question, ask the trustee for clarification or your attorney will. It is important to make a “clean record” so no one wants you to be at all confused.
Be respectful – The last thing you want is an angry trustee.
The trustee is not a judge, you don’t need to refer to them as “your honor”