Debunking the fears of the “341 meeting” in a Chapter 7 bankruptcy
Many people contemplating bankruptcy are likely feeling very stressed. They are drowning in debt and feel helpless because they can’t pay back what they owe. However, they are also likely experiencing a whole host of other emotional issues such as feeling embarrassed, frustrated and scared. When people hear that they have to go to court, the anxiety only increases.
Bankruptcy lawyers say that it’s natural for individuals to feel anxious about going through the process, but one Ohio bankruptcy firm says that it’s important for individuals filing a Chapter 7 bankruptcy to know that the bankruptcy hearing is very informal and should never deter anyone from filing.
Understanding the “meeting of the creditors” hearing
First, when an individual decides to go through a Chapter 7 bankruptcy, a bankruptcy petition is filed that outlines his or her assets and liabilities. Then, an informal court hearing is set. This meeting is known as the “meeting of the creditors” or a “341 meeting” (referencing the section of the U.S. bankruptcy code).
Debunking the fears
This meeting is typically schedule about 30 days after the Chapter 7 bankruptcy petition is filed. It usually takes place in an informal meeting room. Along with the petitioner and his or her attorney, a bankruptcy trustee is present. The petitioner’s creditors are invited to attend the meeting and ask questions (hence the name “meeting of the creditors”) but many do not.
Essentially, the overall goal of the hearing is to allow the bankruptcy trustee to verify the paperwork and information including the petitioner’s debts, assets and income, expenses, tax returns and recent financial transactions, and make sure it’s truthful and accurate.
The trustee may also ask the petitioner questions as well. A few may include:
- Why he or she is filing bankruptcy.
- Whether he or she has accurately provided all information pertaining to property.
- Whether he or she owes child or spousal support.
However, it’s important to note that the bankruptcy judge isn’t there to embarrass, judge, scare or harass the petitioner, but simply to make sure all information is accurate.
The bankruptcy discharge
Once the trustee is satisfied with all of the information and all creditors, if any, have been given the opportunity to speak, the trustee will adjourn the meeting. After the meeting, creditors have 60 days to still come forward and object to the discharge. If no objections are made once the 60 days are up, the petitioner will likely receive a discharge.
It’s natural for anyone filing for bankruptcy to feel anxious, but this is a small price to pay for the feeling of debt relief and the opportunity to start on a fresh financial footing.