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    Creditors at the 341 Meeting

    We have been getting many repetitive questions regarding creditors and the 341 (i.e. Do they come, what causes them to come, etc etc), thus, I thought I would provide a general answer.

    Background

    First, you need to understand the purpose of the 341 and the role of the BK Trustee. What many people fail to realize is the BK Trustee is an advocate for your creditors; the Trustee is appointed to act in the best interests of your creditors, as a group. And the best interests of the creditors is to get some money for the debt they are owed. The 341 meeting is essentially a deposition, the meeting provides an opportunity for the BK Trustee, and any creditor who wants to attend, to ask the debtor questions.

    Trustee as Creditor

    As mentioned above, the trustee is appointed to represent your creditors, but the trustee represents the debtors' creditors collectively. The trustee is not in a position to advocate for the rights of any individual creditor. The BK trustees main job is to determine if there are any assets in the BK estate that can be sold or otherwise used to satisfy your debts, or in the case of a chapter 13, to try to maximize the payment.

    Creditors at the 341 Meeting

    Since the trustee acts on behalf of creditors, collectively...if an individual creditor has a specific issue that needs to be addressed, then they have the right to attend the 341 meeting and ask you questions.

    Do individual creditors actually attend the 341

    The short answer is, almost never. And for the most part, there is very little reason for a creditor to attend the 341 meeting.

    Why might a creditor attend?

    The 3 most common reasons creditors attend 341 meetings are (1) contemplating an objection to discharge, (2) information discrepancy (3) a local creditor that does not know any better.

    (1) A creditor, particularly an unsecured creditor, will probably attend the 341 meeting to assess an objection to discharge assuming there are questionable charges/cash advances on the account. For example, if you did a balance transfer from your AMEX to your Chase Visa within 6 months of filing BK, odds are, Chase will send someone to the 341 to assess your explanation. (keep in mind, that a creditor only has limited grounds to object to discharge, they do not object for the sake of objecting). But even if the creditor has a reason to object, it is still 50/50 as to whether they will show.

    (2) A creditor may attend if they see a significant discrepancy in the information you provided on your petition and the information you have provided the creditor. (honestly, most creditors don't even check, but it can happen).

    (3) Finally, purely local creditors tend to show because they simply don't know any better (they don't know that they don't need to attend )

    A fourth reason a creditor might attend is if you have already reached an agreement with the creditor for a reaffirmation...the creditor may show to have you sign paperwork since they know you are going to be at the 341, but that scenario is not part of the 341 meeting, it is a matter of convenience.

    If a creditor does show, what can I do

    All a creditor can do is ask you questions at the 341 meeting; and since you will be under oath, all you can do is answer honestly.

    The 341, Chapter 7 vs Chapter 13

    Keep in the back of your mind that creditors almost never attend the 341, a creditor is more likely to attend a 341 in a chapter 7 than in a chapter 13. There are even fewer grounds for a creditor to object in a chapter 13, so there is even less reason for a creditor to attend a 341 in a chapter 13. The only creditors that may even think about attending a chapter 13 341 are secured crediotrs.

    To reiterate, creditors ALMOST NEVER attend the 341 meeting, so it is not something you should be losing sleep over.
    Last edited by HHM; 03-16-2008, 10:45 AM.

    #2
    Excellent summary, HHM - thank you! I made this a sticky so that everyone that comes to BK Forum in the future can learn from your words of wisdom too.
    I am not a lawyer and this is not legal advice nor a statement of the law - only a lawyer can provide those.

    06/01/06 - Filed Ch 13
    06/28/06 - 341 Meeting
    07/18/06 - Confirmation Hearing - not confirmed, 3 objections
    10/05/06 - Hearing to resolve 2 trustee objections
    01/24/07 - Judge dismisses mortgage company objection
    09/27/07 - Confirmed at last!
    06/10/11 - Trustee confirms all payments made
    08/10/11 - DISCHARGED !

    10/02/11 - CASE CLOSED
    Countdown: 60 months paid, 0 months to go

    Comment


      #3
      Excellent post - but - you also have to remember that most creditors do not show up at the 341 hearings because of travel issues. Say a filer lives in Fresno, CA, and there is a bankruptcy court in Fresno, but the creditor's headquarters is located in Atlanta, GA. No creditor from outside of a 100 mile radius of the court will attend that hearing.
      Besides, the creditors have up to 60 days following a 341 hearing to object to the discharge of their debts.

      Comment


        #4
        Originally posted by magyar123 View Post
        Excellent post - but - you also have to remember that most creditors do not show up at the 341 hearings because of travel issues. Say a filer lives in Fresno, CA, and there is a bankruptcy court in Fresno, but the creditor's headquarters is located in Atlanta, GA. No creditor from outside of a 100 mile radius of the court will attend that hearing.
        Besides, the creditors have up to 60 days following a 341 hearing to object to the discharge of their debts.
        That is true, perhaps, for smaller creditors, but all the Major creditors (large car finance companies, major credit cards) will have access to attorney's that will attend on their behalf; at least in major metropolitan areas.
        Last edited by HHM; 08-27-2007, 07:36 AM.

        Comment


          #5
          My friend filed 10 years ago and Amex, Capitol One and Providian sent attorneys and showed up to dispute. It happens.

          Comment


            #6
            What happened 10 years ago is no indication of what will happen today, bankruptcy has changed a lot in 10 years and so has the creditors response to it.
            I used to have a life, now I have grandkids.

            Comment


              #7
              At the 341 hearing we attended, numerous, yes "NUMEROUS"
              creditors showed up for many petitioners.

              We were surprised...but however after researching, we learned that in our district all the major credit card companies have Lawyers on retainer. Citi, Chase,Discover,BOA/MBNA, all the biggies.

              And they DO SHOW UP and "REQUEST APPEARANCE" in many cases in our district.
              Usually represented by a paralegal, not the Lawyers themselves.
              Last edited by Ryersonhead; 08-25-2007, 06:55 PM.

              Comment


                #8
                Originally posted by Ryersonhead View Post
                At the 341 hearing we attended, numerous, yes "NUMEROUS"
                creditors showed up for many petitioners.

                We were surprised...but however after researching, we learned that in our district all the major credit card companies have Lawyers on retainer. Citi, Chase,Discover,BOA/MBNA, all the biggies.

                And they DO SHOW UP and "REQUEST APPEARANCE" in many cases in our district.
                Usually represented by a paralegal, not the Lawyers themselves.
                When your in a larger district (like Florida), it may "seem" like they show up more, only because you have more BK filers per capita, but in the large scheme of things, creditors only attend the 341 in a very small percentage of cases.

                Also, keep in mind, notice of appearance gets filed when a creditor wants to get notice of all the filings that are received by the clerk in a particular case...filing a notice of appearance does not mean the creditor will attend the 341 meeting. Granted, filing a notice of appearance is the first step to more creditor involvement, but, again, it is only a in a small percentage of cases in which anything more than a notice of appearance gets filed. (for example, there was a time when E-Cast settlement filed a notice of appearance in every case in which they were notified, at least in some districts, but generally didn't do anything more than that).

                Let's be clear, I did not say they "never" attend, but the percentages are so low, that most filers generally don't have to worry about creditors attending, and most filers that have done their homework will know before-hand if there is a good chance of a creditor attending a 341 meeting.
                Last edited by HHM; 08-25-2007, 07:53 PM.

                Comment


                  #9
                  WOW, nobody showed up to mine! Thank God!
                  BK Ch7 filed May 31, 2007, Discharged August 28, 2007!!

                  Comment


                    #10
                    There was probably 80 people at my 341 meeting, no creditors showed up for any case (There was only about 5 people left in the room when I got called, so pretty sure no creditors were there)
                    Chapter 13 Filed 4/03/06 :blink: 341 Meeting Complete 5/11/06 :yes2:
                    Plan Confirmation 6/16/06 :yahoo:
                    Discharged: 1/5/2010 :yahoo::yahoo::yahoo::yahoo:

                    Comment

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