Meeting of the Creditors:
About 20-40 days after filing for bankruptcy, there is a section 341 meeting (creditor meeting). The Meeting of the Creditors usually takes about 10 minutes, and provides an opportunity for the trustee and creditors (although usually none show) to question the debtor.
The IRS will come if taxes are owed, and will usually request a deadline to file missing taxes. (One item that is required to be provided to the trustee prior to the meeting is the latest tax return (provided to the trustee no later than 7 days prior to the Meeting of the Creditors). If the debtor was not required to file a tax return for the last taxable year prior to filing, a statement to that effect must be provided to the trustee. In addition, the latest filed return must be provided (even if that return is 10 years old).)
The U.S. Trustee's Office may send someone to clarify portions of the petition.
Creditors usually have 5 minutes to ask questions, but are not allowed high pressure questioning.
This is usually the only "court" appearance that a debtor needs to attend, unless special circumstances require additional hearings.
At the Meeting of the Creditors, the trustee will call the debtors up one by one and will ask the debtor questions under oath and recorded. The debtor will show his/her social security card (or other document with your social security number) and photo ID (make sure it is not expired) at the start of the questioning and show any other documents that the trustee asked for. The Chapter 7 trustee is attempting to locate assets that are non-exempt or unprotected.
Prepare for the meeting by reading the petition to ensure that you are familiar with the contents. If there are changes, notify your attorney. Ensure that you are early to the meeting. The meeting goes fast and if you miss your slot, your case could be dismissed.
Questions to be asked at the meeting of the creditors by the trustee under penalty of perjury usually include:
a. Did you personally sign the bankruptcy documents after carefully reviewing them?
b. Are there any additions or corrections to the documents?
c. To the best of your knowledge is the information in the documents true and correct?
d. Are all your assets identified on the schedules?
e. Have your filed your income taxes? Do you have a return coming? What did you do with your return if it was received?
f. Have you listed all your creditors?
g. Have you previously filed for bankruptcy? When?
h. Do you have any interest in real estate? Sold any real estate in the last 12 months?
i. Do you have any interest in businesses in the last 6 years?
j. Does anyone owe you any money? Is it collectable?
k. Are you involved in any lawsuits or have the potential for filing a lawsuit, or anyone filing against you?
l. Have you made any transfers of personal property or given away any property in the last year? Or to relatives in the last 2 years? Repaid any family loans in the past year?
m. Does anyone hold any property belonging to you?
n. Are you entitled to any life insurance proceeds or inheritance? (Note: any life insurance or inheritance received within 6 months after filing is property of the estate.)
o. Are your bills primarily consumer bills?
p. Have you made any large payments over $600 in the past year? Or to creditors over $600 in the last 3 months?
q. Do you own any cash value life insurance?
r. Have you engaged in any business in the last 6 years?
s. Where do you live, and for how long? Have you lived in Iowa for over the last 2 years?
t. Did you have on hand or deposit over $1000 at the time of filing? (If so, the trustee will want copies of bank statements, etc.)
u. Do you owe any child support? (If you do owe any spousal or child support, you will fill out a form for the trustee.)
v. Did you have a written contract with your attorney on his fees?
w. Did your attorney explain the bankruptcy options under the various chapters 7, 13, etc.?
Note: The debtor has undoubtedly paid down bank accounts and other assets prior to bankruptcy. However, it is forbidden to pay down these accounts to prevent money from going to a trustee or a creditor. Under section section 727(a)(2) of the bankruptcy code, a discharge is granted to a debtor unless ...the debtor, with intent to hinder, delay, or defraud a creditor or an officer of the estate charged with custody of property under this title, has transferred, removed, destroyed, mutilated, or concealed, or has permitted to be transferred, removed, destroyed, mutilated, or concealed...property of the debtor, within one year before the filing of the petition. Thus, the debtor must not pay down accounts to prevent the money from going to a creditor or the trustee. A discharge of the debts can be denied and the bankruptcy closed and filing another case for years denied. a criminal case can even be filed. One reason for the Meeting of the Creditors is to determine if assets have been hidden or transferred. All debtors usually pay down their assets prior fling. As long as the assets are used to pay bills (but not normally to insiders or family members), normal expenses, creditors, etc. this reason may be allowed. It is not allowed to prevent the money going to a trustee or creditor!
After the meeting, if it went well, the meeting will be concluded. If there were problems, the meeting may be continued to a later date to provide documents, etc.
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