This Week's Topic

Once you file your bankruptcy petition, you will be notified of the date and time of your 341a examination. Hopefully, by the time you file your petition, you will know what a 341a examination is.

If you don’t, it’s a meeting (sometimes called a first meeting of creditors) between the debtor, the debtor’s attorney (if any), and the trustee (a court-appointed person—usually a bankruptcy attorney— assigned to administer your bankruptcy case). Although it is an opportunity for creditors to show up and ask questions, it is VERY unusual for creditors to appear and, when they do, the kinds of questions they are allowed to ask you are VERY limited. Your creditors will probably NOT show up, so don’t worry about it.

The first thing you should know is that the 341a is not something you should worry about, stress over, or lose sleep about.

The trustee’s job is to locate non-exempt assets that can be sold to raise money to pay creditors. Trustee’s are paid a minuscule amount for cases with no non-exempt assets. Most individuals do not have any non-exempt assets. Therefore, your trustee wants to spend as little time as possible on your case.

You (or your attorney) will be asked to provide documents to the trustee for review prior to the 341a. This request usually asks for Driver’s License, Social Security card, most recent state and tax returns, 3-6 months of pay stubs (unless these were filed with the petition as required by some courts), 3-6 months of bank statements, including the statement that covers the filing date). It is important that you provide these documents by the stated deadline. If you don’t, your 341a will likely be continued until the documents are provided.

You and your spouse (if you filed jointly) must appear at the 341a. If you cannot appear for any reason, call the trustee’s office and ask that your examination be continued. Under no circumstances should you simply not appear. If you do not appear, the hearing will likely be continued once. If you fail to appear again, your case will likely be dismissed.

So what does happen at the 341a? Assuming you have provided all the requested documents in a timely manner, the trustee will ask you a few easy questions, such as:

• Did you review your petition before you filed it?

• Is everything in your petition true and correct?

• Are you expecting a tax refund (more about this one next week)?

• Are you entitled to any inheritance (or similar) within the next 6 months?

The trustee is not going to ask you about specific expenses. You’ve probably heard that you shouldn’t use your credit cards during the last 90 days before you file. First, this caution primarily concerns frivolous expenses such as vacations or fur coats (does anyone buy fur coats these days?) and it’s up to your creditor to challenge these expenses, not the trustee.

These days, most of you will not have to appear in person at your 341a. Some trustees conduct them on Zoom. Others use a telephone conference call format. You should receive instructions prior to the hearing. If you don’t, you should check the trustee’s website for instructions. If you have an attorney, and it’s convenient, you can go to the attorney’s office and be together for the meeting, but it’s not necessary. Technology allows you and your attorney to be together (virtually) for the hearing.

There will be a number of other cases on calendar at the same time and you will be able to listen to all the cases in front of you so you will get an idea of the questions your trustee asks other debtors. You can get the trustee’s calendar from their website prior to the hearing so you will know when your case will be called. If you are first on the calendar, I recommend that you call in (or Zoom) to your trustee’s 341a calendar a few days ahead so you can listen. These are public hearings and anyone can join on the call (just make sure you are muted).

What the trustee will NOT ask includes the following:

• Why haven’t you paid your creditors (or similar questions about how you got into financial trouble)?

• Have you used your credit cards to make any frivolous purchases? What were they?

• Why aren’t you working (you may be asked if you have any job prospects—answer honestly; the trustee can’t take your future earnings unless you are in a chapter 13);

There are additional questions that may be asked if you have assets, including a home, regarding how the value was established.

If you were required to pass the means test, you may be asked questions about your expenses, especially if you claim “extraordinary” expenses.

At the conclusion of the meeting, your trustee will either continue it for the purpose of your providing additional information, or conclude it. If it is “concluded,” the trustee will file a “no asset” report shortly after the hearing, which means that none of your asset valuations or exemptions are challenged. Following your 341a, creditors and the trustee have 60 days to challenge your bankruptcy for any perceived abuse. This kind of challenge is extremely unusual. Although people worry about what might happen, mostly nothing happens. Just try to be patient.

Tip for the week: Relax. The worst is over once you file your petition. Provide the requested document and you will be fine.

Next week’s topic: Tax refunds