Continuances of Meetings of Creditors – What is the Bankruptcy Trustee Investigating?
Imagine this: you have filed all necessary bankruptcy paperwork and have attended your mandatory 341 meeting of creditors. You honestly answered all questions that the bankruptcy trustee asked you. Then, you get a notice that your bankruptcy trustee is continuing the meeting of creditors. You may be wondering “why? I already answered all of their questions!” This continuation of a 341 meeting of creditors could be for a variety of reasons. If you need assistance with your bankruptcy filing, including the 341 meeting of creditors, contact an experienced bankruptcy attorney in California.
341 Meeting of Creditors Continuance in Bankruptcy
A 341 meeting of creditors is typically a single meeting conducted by the appointed bankruptcy trustee. The bankruptcy trustee and creditors (if they choose to attend) have the opportunity to ask debtors questions regarding their bankruptcy petition and schedules under oath. While most bankruptcy filers only have to attend one 341 meeting, there are circumstances where a bankruptcy may continue the meeting.
The 341 meeting may be continued if:
- You did not bring adequate proof of identify
- The trustee needs more documentation from you to verify information your petition
- A creditor needs more time to question you about your obligations
Lack of Proper Identification
Bankruptcy trustees must verify a debtor’s identity with a proof of identification and a Social Security Number. Common acceptable forms of ID include a state driver’s license, US passport, military ID, and more. Always double check with your trustee to ensure you bring correct identification to your meeting. If you have not brought proper forms of ID or if the trustee isn’t satisfied with the forms of identity you did provide, the trustee will push the 341 meeting to a later date.
Keep in mind that trustees need to see the same name on your identification as is listed on your bankruptcy petition and schedules. For example, the name John Thomas Doe on a California driver’s license and John Doe on a bankruptcy petition will not match. The trustee will likely require Mr. Doe to amend his bankruptcy petition to reflect the name on his identification, thereby requiring a 341 meeting of creditors continuance.
No Asset vs. Asset Cases
Bankruptcy trustees must evaluate whether a case is known as a “no asset” case before deciding to move forward. A no asset case is a bankruptcy case in which all property is exempt (California provides for several exemptions, including the generous homestead exemption). In other words, you will not be required to turn over cash or property to the trustee in a no asset case. The trustee will then file a Report of No Distribution which alerts the court that the trustee does not intend to pursue any of the debtor’s assets. It is very rare for a trustee to continue a 341 meeting of creditors in a no asset case.
On the other hand, if your case involves having unprotected assets and/or cash that could be used to pay unsecured creditors, this is considered an asset case. In an asset case, the trustee may have more questions and may continue the meeting of the creditors. The trustee’s goal in a Chapter 7 bankruptcy is to maximize return to the debtor’s creditors through liquidation, so it is of utmost importance that the trustee has correct information regarding the debtor’s assets. The trustee will send a notice to creditors alerting them that they can file a proof of claim. Creditors will file a proof of claim to inform the bankruptcy trustee about the claim, including how much they are owed, so the trustee can pay the creditor (if applicable). If the bankruptcy trustee finds an inconsistency with the debtor’s list of assets, it can drastically change the course and the outcome of the bankruptcy. A complicated asset case is just one reason a trustee may choose to gather more information about the debtor’s assets by continuing a 341 meeting of creditors.
Other Required Bankruptcy Meetings
Although not actually a 341 meeting of creditors, there are several other reasons bankruptcy filers may have to attend mandatory meetings. Always check with your bankruptcy trustee and bankruptcy attorney to ensure that have adequately prepared for all required bankruptcy meetings.
Chapter 13 Confirmation Hearing
A Chapter 13 confirmation hearing is not a continuation of the 341 meeting of creditors, but rather an entirely different meeting required of Chapter 13 filers. This meeting allows Chapter 13 debtors to submit a proposed repayment plan for their debts and present it to a bankruptcy judge. The judge will approve the plan based on feasibility of the repayment plan and whether the bankruptcy was filed in good faith. A confirmation hearing is not required in Chapter 7 bankruptcies. Unlike a 341 meeting in which a debtor is required to attend, debtors may allow their bankruptcy attorney to attend the meeting in their place.
Adversary Proceedings: Resolving a Creditor Objection to Discharge or Denial of Discharge Action
On occasion, a creditor or bankruptcy trustee may object to a debt being discharged through a bankruptcy adversary proceeding. They may feel that the debts were incurred through fraudulent or intentional wrongful acts and should therefore not be discharged. Common reasons creditors may file adversary proceedings include the bankruptcy filer purchasing a luxury item shortly before the bankruptcy case is filed or debtors intentionally running up credit card debt with no intention of paying the debt back. A debtor must then convince the bankruptcy court that he or she is entitled to discharge that debt.
What if I Don’t Show Up?
The United States Bankruptcy Code states: “The debtor shall appear and submit to examination under oath at the meeting of creditors . . .” 11 U.S.C. § 343. Failing to appear at a 341 meeting or a continuance of a 341 meeting of creditors without reaching a prior agreement with the trustee can have serious consequences. A trustee may suggest a case dismissal, resulting in no debts being discharged and creating complications for future bankruptcy filings. The bottom line is this: show up to your 341 meeting!
Contact an Attorney With Experience Working For, With, and Against Bankruptcy Trustees
Nobody wants to hear that their 341 meeting of creditors has been continued, thereby requiring them to attend yet another 341 meeting. Having a knowledgeable bankruptcy attorney in your corner during the 341 meeting of creditors is an invaluable tool. A skilled bankruptcy attorney can help properly prepare your petition and schedules, can advise you on what documentation to bring, and can work with the bankruptcy trustee to ensure a productive 341 meeting of creditors. Reach out to the bankruptcy attorneys at Talkov Law for a free, 15 minute evaluation of your bankruptcy case online or at (844) 4-TALKOV (825568).