Wednesday, May 5, 2010

What to expect at your 341 Hearing

If you have filed a bankruptcy you will be required to attend a 341 meeting of creditors whereby your creditors and a trustee, who is an attorney working for the government, have the opportunity to ask you questions. For many individual debtors, this is the only hearing that they will need to attend during the course of their bankruptcy proceeding.
In the Southern District of Indiana there are many Chapter 7 interim Trustees and two Chapter 13 trustees. These trustees (not the judge) with preside over the 341 meeting of creditors, which is the hearing that every bankruptcy debtor is required to attend. Most clients have a lot of apprehension about attending this hearing. They are nervous about creditors appearing, about whether the trustee will understand why they needed to file a bankruptcy, how they will be treated by the trustee, and how they should answer the trustee’s questions.
These themes are so similar from client to client that I decided to include this topic in my blog. Just like all humans, each trustee who presides over the hearing has his or her own personality, likes and dislikes. However, there are a few things that a debtor can do to make their 341 go a little more smoothly.
1. 1. Don’t expect your attorney to answer the questions for you….the trustee is going to be asking you questions about your life and not your attorney’s life. You should know more about your own life and finances than the attorney. The trustee is not trying to trick you with legalese…they simply want honest, factual answers.
2. 2. Don’t interrupt! The trustee deserves the common courtesy of being able to finish his or her question. Also, you are going to be testifying under oath, so it is extremely important that you know what the question is before you ask it.
3. 3. Be on time and bring the documents required. In the Southern District of Indiana the trustee must verify a debtor’s identity with his or her social security card and current drivers license. If you don’t bring these documents to the hearing your trustee will likely reset the hearing and you will have to have it on another day. It is also extremely important to appear at the time you attorney directs. You attorney will want to review with you what the trustee will likely ask so that you are adequately prepared to answer the questions. If you arrive late you may be rushed into the hearing without the opportunity to ask any questions. If in doubt, arrive early and wait. It will ease your nerves to know you have found the correct location instead of getting there at the last minute. I have actually heard one of my former clients run down the hall to arrive at her hearing 5 minutes late. Suffice it to say that her frazzled nerves could not take much more by the time we walked out of her hearing.
4. 4. Do not look at the trustee as an adversary. There is no reason to enter into a verbal argument with the trustee during your hearing. There is nothing to be gained from taking a foul or argumentative with the trustee. The trustee is not your enemy. He or she is there because you have asked the Court to grant you the relief of a bankruptcy discharge.
5. 5. Don’t ramble. In the Southern District of Indiana it is entirely possible that the trustee has 5 or 6 hearings set each half hour. The hearings proceed quickly and the trustee likes to stay on time so as not to waste their own time or that of other attorneys and debtors. Listen to the question posed by the trustee carefully and respond with the answer; nothing more. You will find that many questions can be sufficiently answered with a simple “yes” or “no.” The trustee will appreciate your attentiveness and ability to provide the trustee with the information he or she needs.
6. 6. Relax. After 5 years of practice, I have yet to see anyone fail to survive a 341 hearing. The most common response I hear from my clients is “that was it?” I can understand that it is normal for those who need to file a bankruptcy are apprehensive about the bankruptcy process, especially the hearing. However, the trustees are generally very respectful and not judgmental at the hearing.
The hearing will change from trustee to trustee and from Court to Court, but I hope these tips will help your hearing proceed more smoothly.