The First Meeting of Creditors, or 341 hearing, exists so that the Trustee assigned to administer the case can make sure he understands the schedules, identify any non-exempt assets he needs to administer and ask the Debtor any questions he needs answered. Also, any creditors who need to know something (like car lenders who want to know if the Debtor is going to keep a car and verify that it is insured) or someone who believes he has been defrauded and needs a chance to ask a few questions to decide whether or not to pursue an objection to discharge have the right to ask questions as well. These are the people for whom this hearing exists, but for most clients, it is a non-event.
Once you have been sworn in, you will take a seat to the Trustee’s left, and your lawyer will stand opposite you behind a podium. Your lawyer will then begin asking you incredibly difficult questions — like your Name. (You might want to study.) Your lawyer should go over with you exactly what he will ask before the hearing, but the questions don’t generally get much harder than that first one.
Then, the Trustee has the right to ask you questions if he wants to. He may ask some basic questions to make sure that he understands everything. Again, not really much harder than that, “Please state your full name for the record” bit; and your lawyer should give you a pretty good idea of what kinds of things about your case will catch the Trustee’s eye.
After that, any creditors present have the right to ask you questions and so does the U.S. Trustee’s office if they want to. The U.S. Trustee’s office is generally interested in asking questions about the Means Test, any budget entries that look excessive or anything that might smell like fraud or abuse.
It is that whole idea that their creditors are going to ask them questions that I think really scares my clients. Look at it this way. No one is going to pay a representative to drive to the Courthouse and cool his heels through the first part of the docket without a good reason. Car lenders may want to know if you are going to keep the car and if it is insured. That makes sense. They need to know that.
For most of my clients from the time their case is called by the Trustee until they are heading out the door is less than five minutes.
Now, there are exceptions. Business cases or other cases with significant assets and large dollar figures involved will take more time. For one thing, they are more complicated and there is more to understand. For another, the bigger the dollar figures and the more things going on the greater the opportunity to conceal funds or otherwise commit fraud.
Of course, people who kind of, sort of, forgot to tell their lawyers about the rent house they own in another County or oil and gas rights in Texas are generally in for an unpleasant surprise. People who filed Bankruptcy leaving a number of people feeling like they were defrauded or just a ticked off ex-spouse will frequently prefer a root canal without anesthesia. Clients whose lawyers either didn’t do their jobs or didn’t know their jobs are generally not in for a brief or pleasant time. Anyone who thought that not mentioning something to his lawyer was a good idea is in for an eduction. These are generally people for whom the 341 is not pleasant.
That last paragraph was a little smug and isn’t completely true. There can be plenty of good, honest people who are well represented whose 341’s aren’t fun. Construction contractors who left a bunch of houses unfinished and bills unpaid will frequently find homeowners showing up to either lay the groundwork for an objection to discharge or just to regain a pound of flesh. Ex-spouses can be unpleasant additions to a 341 room.
Ask your lawyer if anyone is likely to show up on your case. Basically, non-institutional creditors (normal people instead of Capital One) are likely to show up just because they got something in the mail and don’t know that they don’t have to.
If your lawyer tells you that you have nothing to worry about, then take a book. Otherwise, you will leave shaking your head over some poor sod who went before you and didn’t have a good day. I will post a few of those stories another time.