What to Expect: Bankruptcy 341 Creditor’s Meeting

For inexperienced Bankruptcy attorneys representing a debtor, below is an introduction that may serve helpful before attending your first 341 Creditor’s meeting. 

The 341 Creditor’s Meeting is generally the only Court appearance in a Chapter 7 Liquidation Bankruptcy case and is the first hearing of two hearings in a Chapter 13 Reorganization Bankruptcy case.  The second and most importation court appearance in Chapter 13 is the Confirmation Hearing (see What to Expect: Chapter 13 Bankruptcy Confirmation Hearing). 

The 341 meeting in New York is held in a conference room in the Court.  The purpose of the meeting is for the Trustee to investigate the Debtor’s financial status.  Creditors are invited but rarely appear.  The hearing is mostly a conversation between the Trustee and the Debtor, and is a very informal setting.   

What to Bring: Aside from anything that the Trustee’s office has specifically requested from you, always make sure that you have printed the entire Bankruptcy filing.  The Trustee will go through and refer to specifics, and it is always good to have a copy of front of you to which you and your debtor may refer.  Also, if you have not already provided the signed filing, past 2 years tax returns, Credit Counseling certificate, pay stubs from the 60 days prior to filing, to the Trustee’s office, have a copy of the same available to hand to the Trustee. 

**Make sure your Debtor has her/his Social Security Card and government-issued, Picture ID. 

If you are lucky, posted outside of the Courtroom will be a list of the scheduled cases giving you an idea of the order in which your case will be called.  The Trustee will be sitting at a table in the front of the conference room.  We like to go a little early and listen to the previous cases to determine the common questions the Trustee asks each Debtor. 

When your case is called you sit across from the Trustee to the left of your debtor.  The Trustee will ask the Debtor to swear under oath and then ask you to note your appearance.  You should then say “[Your Name] attorney for the debtor, admitted to the [name of District].”  The Trustee will then proceed by asking your debtor a series of questions based on the filing and especially the schedules. 

Common topics covered by most Trustees in the aforementioned districts:

1) If there is any real property or cars

2) Monthly income and job-related questions

3) One Trustee always asks what has put the debtor in this financial situation.  A common answer is “Living above my means”

4) Factors surrounding residency of the debtor

5) Monthly expenses as per the schedule

You may interject if necessary to correct a discrepancy.  If the Trustee notes that there are errors or inconsistencies in the filing, assure the Trustee that you will amend the filing to reflect the correct information.  Unless there is something seriously wrong with the filing, or if the Trustee finds that the Debtor’s filings are inconsistent wit the reality of the Debtor’s situation, the meeting should be quick and painless.  After the meeting, you may follow up with Trustee’s office if necessary.  The Trustee will then make a determination to recommend discharge or dismissal some months later.

     

Bankruptcy ECF filing tips:

If your client need’s to file immediately and are not in the position to complete all required paperwork (this is common if there is a pending foreclosure sale) then you may do the “skeleton filing” either ECF (preferred by the Court) or in-person the.  The filing must include the following: Petition (Official Form B1), The Declaration of the Debtor (Official Form B1D) for which you will also need the debtor to attest to the fact that he/she has completed Credit Counseling Course (can be done online, usually about 1 hour, we use Greenpath at greenpath.com); the Creditor’s Matrix (List of Creditors)- if done ECF must be filed under separate area called Creditor Maintenance, and the Statement of Social Security Number (only if filed in person).  **Note: If filing in person, the forms must be signed by the debtor.  If ECF, then signature lines should include electronic signature: “/s/ Name.”

In general, when filing ECF:

1) If you are not having all of the forms signed and scanned in, you must include electronic signatures where appropriate.  “/s/ [Name]” signifies an electronic signature. 

2) Format of all documents except for the List of Creditors must be in PDF or some picture format.  The List of Creditors must be in txt format.  I have used Wordpad and Notepad to generate the filename.txt. 

3) The first line of List of Creditor’s must only have the Debtor’s name as filed and case number if available.

4) Redaction: On all forms filed ECF, you must redact all but the last four digits of a debtor’s Social Security Number.   

5) I have not tried this yet: The hearing schedule, “calendar” is based on the time of filing.  The earlier you file, the earlier you are scheduled.  It may be worth it to wait until midnight and file for the next day in order to ensure that you are not waiting at the Court for hours. 

6) Filing Amendments will sometimes cost more money depending on what is being amended.  If you have more than one amendment for which extra costs are necessary, you may, if the Court allows, scan all amendments as one PDF and upload as one document.  

**Note: The above information is based on our experience in Southern and Eastern District Bankruptcy of Courts in New York.  If you are not appearing in these Districts, then this may not apply.  

What is a Traverse Hearing?  In New York, a traverse hearing is held in Civil cases, when a party alleges improper service.  At the hearing, the burden lies on the moving party to present evidence as to proper service which may then be rebutted by the party alleging improper service. 

In civil litigation, the traverse hearing may be waived by the parties, which will result in a granting of a motion to vacate.