WHAT IF A CREDITOR SHOWS UP AT MY 341 MEETING?

When a debtor files a Chapter 7 or Chapter 13 bankruptcy case, notices of the meeting of creditors is sent to all the creditors of the debtor.  The meeting of creditors is also called the trustee's meeting and the 341 meeting (after section 341 of the bankruptcy code which compels the meeting).  This notice informs the creditor, among other things, that the debtor has filed a bankruptcy; of contact information for the debtor's attorney and the trustee assigned to the case; and of the date, time and place of the meeting of creditors.

While notices are sent to all of your creditors the odds are that no creditor will appear at your meeting of creditors.  If a creditor does show up, it is almost always a local creditor, like a local bank seeking information regarding a secured loan, or individual creditor.  It is rare to see a representative of a national creditor at a meeting of creditors. 

The main reason that creditors do not appear at the meeting is that creditors are not allowed much time to ask questions of the debtor.  What the creditor can gain from the meeting does not justify the expense of sending a representative.  The bankruptcy trustee conducts a busy docket of bankruptcy debtors and is required to question each debtor.  Consequently, the trustee will only allow a few minutes for any creditor questions, and will not permit any "fishing expeditions" from a creditor.  A creditor who needs more time for questioning the debtor can schedule a private examination called a "section 2004 exam."  Section 2004 exams are extremely rare.

Most individual creditors who appear at a meeting of creditors do so because they do not understand the process.  Individual creditors usually believe that their attendance is important to maintain their claim against the debtor.  The questions are generally inane, like: "Are you going to pay me?" or "You promised to pay me, right?"  The trustee cannot give legal advice to creditors, so without an attorney the individual creditor is usually left floundering.

When a creditor is represented by an attorney, the questions generally concern the debtor's schedules of assets, liabilities, income, and expenses.  These questions may seek to uncover inconsistencies in the schedules.  Questions that go beyond the schedules may be objected to by your attorney.  The trustee will not permit the creditor to engage in a deposition of the debtor with the trustee acting as judge.

If you expect a creditor to attend your meeting of creditors, discuss the matter with your attorney.  While the ordinary Chapter 7 and Chapter 13 bankruptcy case will not have creditors in attendance at the meeting, every case is unique.  Discussing your case with your attorney is the first step in being prepared for creditors at the meeting.