The Meeting of Creditors

The Meeting of Creditors

What is the Meeting?

The meeting of creditors is also called a 341 meeting since it references section 341 of the Bankruptcy code.  That code provisions provides that a meeting must take place where creditors are allowed to come and ask the debtor about the debtors financial condition, assets, their Bankruptcy schedules and statements, etc.

In reality most cases never have a creditor present.  This is due to the fact that most creditors are large lenders (credit cards and banks) who do not have the resources to devote to so many debtors.  Those creditors rely on the trustees to do their job in seeing if their might be a Bankruptcy estate involved.

Remember, the meeting is not Court.  In most cases the debtor will never have to go to Court to see the Judge.  I would say less than 1% of cases involve the Judge resolving a legal issue. 

Who is the Trustee?

A trustee is appointed by the Court to represent the unsecured creditors on a whole basis.  The model is designed to operate on an efficiency basis since it would be inefficient to have lots of unsecured creditors getting involved on an individual basis.   In the Eastern District of Texas there is one (1) Chapter 13 trustee and four (4 )Chapter 7 trustees.

The Chapter 13 trustee is Cary Ebert.  You can find her website here.

The Chapter 7 trustees are:  Michelle Chow, Mark Weisbart, Linda Payne, and Chris Moser.   The Chapter 7 trustees don’t have individual websites like the Chapter 13 trustee.

The  Chapter 13 trustee and Chapter 7 trustee operate in a different manner since the timing and procedures or each chapter are different.

The Chapter 13 Meeting

The staff for Cary Ebert conducts the meeting for Chapter 13 cases.  The meetings are held at The Atrium building in Plano.  500 North Central Expressway on the third floor.

The meeting itself generally takes place about 2 months after the case is filed.  You are required to bring your DL and proof of social security number to the meeting so that the trustee can verify your identity.

The trustee’s role in the meeting is to make sure that you have reviewed all the paperwork in the case and that is true and correct to the best of your knowledge.  Before the meeting they will ask for recent paycheck stubs, the most recent tax return, and often times bank statements.  The trustee ask for these items because they want to make sure that your case is complying with the various test (disposable income test and best interest test) so that the Judge can confirm your plan.

The meeting is pretty straight forward with the questions being asked first.  You can find the exact questions asked here Chapter 13 341Questions

Next, trustee will then look at your paycheck stubs and compare it to the numbers that your attorney came up to complete your schedules.  Finally, the trustee will go over your Plan to make sure you understand your payments to whom you  are paying within your plan.  The trustee uses this information to complete a confirmation report.  This confirmation report is sent to the Debtor’s attorney to see if the trustee has any objections to confirmation.

The Chapter 7 Meeting

The Court will assign one of the Chapter 7 trustees listed above and your meeting date the day AFTER you file your Chapter 7 case.  The meetings typically takes place 20 to 45 days after you file your case and the meeting is at the Plano Event Center located at 2000 East Spring Creek Parkway in Plano.

The meeting itself takes about 15 minutes.  The role of this meeting is to determine if there any assets that would belong to the Bankruptcy estate.  This goes hand in hand with exemptions which you can read more about here

I give my clients a generally list of questions that I cover along with some possible trustee questions.  You can find that document here Chapter 7 Questions.

Most Chapter 7 meetings take less than 5 minutes.  We just go over the fact that you reviewed the paperwork and listed all the assets (everything in the world that you own).  We also just make sure you haven’t done anything else that may create a possible asset for the trustee like:  give away any property, pay back a family member or friend a large sum of money, or sell or transfer any property for less than fair market value.   Finally, we establish that you understand the windfall rule.  The windfall rule is if you become entitled to a large sum of money (like insurance proceeds, gambling winnings, or inheritance rights) that you must report that money as it may become part of the Bankruptcy estate.

Summary

Remember that the Meeting of Creditors is not Court.  It is generally an informal hearing to establish you have reviewed the paperwork and it is true.  At Collins & Arnove we establish proper expectations for this meeting so the client has less anxiety and so that their are no surprises.  Call us at 972-516-4255 to set up a free consultation to go over your individual situation today.