What is a 341 Meeting of the Creditors and how they can go terribly wrong…


A 341 Meeting of the Creditors is a part of the Chapter 7 and Chapter 13 Bankruptcy Process. The meeting is scheduled about 30 days after you file for bankruptcy and is is presided over by a Bankruptcy Trustee. No judge is present and the proceedings will be recorded. You will be sworn in and the Bankruptcy Trustee will begin to ask you questions.

  • Did you read the documentation before signing?
  • Did you list all of your assets?
  • Did you list all of your debts?
  • Is the information you provided accurate?
  • Do you want to make any corrections to the schedules?
  • Have you ever filed for bankruptcy before?

One interesting aspect of these meetings in Colorado is that you will wait in a room with all of the other people who scheduled for that day. In the room with you is the trustee and one by one you get to watch the questioning process of all of the people in line ahead of you.

The true purpose of the questioning on the part of the Trustee is to determine what non-exempt assets you may have that can be distributed to your creditors. Typically these creditors do not appear at the creditors meeting. The Bankruptcy Trustee in essence, represents them, but it is absolutely essential that an attorney represent you. Here is an example of why:

At a recent 341 Meeting I was waiting for one of my cases to be called when the bankruptcy trustee called a case ahead of mine. The case had been filed pro se so there was no bankruptcy attorney representing the debtor. The debtor was a young woman in her early twenties and the trustee asked her about her 2010 tax refund. She had received and spent her $5,000.00 refund prior to filing her bankruptcy petition so she thought everything was okay. We then witnessed the following exchange between the young woman and the Bankruptcy Trustee:

Trustee, “How did you spend the $5000?”

Woman, “ I paid back a $3,000.00 loan to my mother and a $2,000.00 loan to my brother.”

Trustee, “I see, tell me miss what is your mother’s name and address?”

Woman provides the information.

Trustee, “What is your brother’s name and address?”

Woman provides the information.

At this point in time it was obvious that there were two things this young woman didn’t know:

  1. Paying back debts to family members or friends during the year before filing a bankruptcy petition is a preferential payment and the bankruptcy can and will take back the $3,000.00 payment to the mother and the $2,000.00 payment to the brother.
  2. The trustee would be contacting both her mother and her brother and force them to turn over the $3,000.00 payment and the $2,000.00 payment to the bankruptcy estate.

After the 341 Meeting, the trustee will take possession of any non-exempt assets and distribute them to your creditors, however in most instances there are no assets to perfect. At this point you simply wait for your discharge to arrive in the mail. In Colorado this takes approximately 75 days.

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