Legal Definitions - Meeting of Creditors

A Meeting of Creditors, often referred to as a "341 meeting" (after the section of the U.S. Bankruptcy Code that mandates it), is a mandatory gathering that takes place in nearly all bankruptcy cases. It is typically held approximately one month after an individual or business files for bankruptcy.

This meeting is presided over by a U.S. bankruptcy trustee, whose primary role is to verify the accuracy and completeness of the financial information provided by the debtor in their bankruptcy paperwork. The trustee asks the debtor questions under oath to confirm details about their assets, debts, income, and expenses, and to identify any potential fraud or undisclosed assets.

While creditors are invited to attend and have the opportunity to ask the debtor questions, their attendance is not required. However, the debtor's appearance at the Meeting of Creditors is compulsory. The meeting is generally brief, often lasting only a few minutes, and serves as a crucial step in the bankruptcy process before the case can proceed, typically towards the discharge of eligible debts.

• Example 1 (Individual Chapter 7 Bankruptcy):

  Maria files for Chapter 7 bankruptcy after losing her job and accumulating significant medical and credit card debt. About a month later, she attends her Meeting of Creditors. The bankruptcy trustee reviews her submitted financial documents, including her income, expenses, and list of assets like her car and household goods. The trustee asks Maria under oath to confirm that all information is accurate and complete, ensuring she hasn't overlooked any assets or income sources, and verifying that her claimed exemptions are valid. A representative from one of her credit card companies attends and asks a few questions about recent large purchases.

• Example 2 (Small Business Owner's Personal Bankruptcy):

  John, who owned a struggling landscaping business structured as a sole proprietorship, files for Chapter 7 bankruptcy to address both his personal and business debts. John's Meeting of Creditors focuses on both his personal and business finances. The trustee questions him about the business's inventory, client contracts, outstanding invoices, and any business equipment. The trustee also asks about any transfers of business assets that occurred shortly before filing, looking for any attempts to hide property from creditors. John's appearance is mandatory to answer these detailed questions.

• Example 3 (Verification of Assets):

  Sarah files for Chapter 7 bankruptcy, listing her primary assets and debts. However, the trustee's preliminary review of public records suggests Sarah might have recently received a substantial inheritance that wasn't listed in her bankruptcy schedules. During Sarah's Meeting of Creditors, the trustee specifically asks Sarah under oath about any inheritances received in the past year or two. This situation highlights the trustee's role in verifying the accuracy of the debtor's filings and detecting potential undisclosed assets or fraud, which is a core purpose of the meeting.