Monday, April 16, 2012

What is a Bankruptcy 341 Hearing Like?

We are frequently asked what it's like to attend a 341 hearing in Phoenix, Arizona. Below is a detailed description about the hearing and the questions you may be asked by your bankruptcy trustee.

Shortly after your Chapter 7 bankruptcy case is filed, the Clerk of the U.S. Bankruptcy Court will send notice of your filing to all parties and creditors listed on your bankruptcy petition.  The clerk will also assign a Chapter 7 bankruptcy trustee and set a date for you Section 341 meeting of creditors. There are several reasons for the Section 341 meeting of creditors.

  1. The meeting is required in the bankruptcy code—you must be examined under oath with regard to the information contained in your schedules to be eligible to receive a discharge. Because the requirement is found in §341 of the bankruptcy code, the hearing has earned the nickname “341 Hearing”.
  2. It gives creditors an opportunity to ask questions of you with regard to the information listed in your petition and schedules;
  3. It allows the trustee to take sworn testimony from you with regard to the information contained in the petition and schedules. A trustee will ask you additional questions with regard to you assets, liabilities, income, expenses and statement of financial affairs.
  4. The trustee must see your driver’s license and social security card to verify that you are who you say you are.
Getting to the Phoenix, Arizona Bankruptcy Courthouse:
For everyone living in Maricopa County, your 341 hearing will take place in the Federal Bankruptcy Courthouse at 230 N. First Ave. in downtown Phoenix. There is no free parking near the Courthouse; either you must park in a parking garage or on the street and feed quarters into a meter. Allow yourself extra time to find a parking spot, especially if you are unfamiliar with downtown Phoenix.

Upon entering the Courthouse you will have to go through a security checkpoint, similar to that of an airport, so do not bring any weapons or paraphernalia:)

The actual 341 hearings take place on the first floor in Suite 102, if you get lost; ask a security guard they will be able to point you in the right direction. There is a central waiting area with two rooms for hearings on opposite sides of the waiting room. Two sets of hearings take place in different rooms at the same time. At the appointed time the Trustee or one of his employees will open the door and call out for everyone with a hearing at that time to enter the room. Typically six sets of people and their attorneys have a hearing scheduled during the same 30 minute block.

What to bring to your meeting of creditors?
You have to prove that you are who you say you are at your 341 hearing. You must bring your government issued photo I.D. (drivers’ license) as well as your social security card. You cannot bring a copy of the social security card you must bring the actual card (not a photocopy). Also, your passport won’t work as a replacement for you social security card because your passport doesn’t have your social security number.

Your Chapter 7 bankruptcy trustee will compare the information on your identification with the information submitted on your bankruptcy petition. The purpose of this requirement is to help curtail identity theft and bankruptcy fraud. Criminal have taken a fake social security number, incurred debt associated with that number and then filed for bankruptcy using that number. Requiring the original social security card at the 341 hearings has curtailed this type of fraud.

Who appears at the meeting of creditors?
Bankruptcy is open to the public and so anyone who wants can attend your 341 hearing. However, in most cases, only you, your attorney, and the Chapter 7 bankruptcy trustee will actually participate in the hearing. Your creditors have the right to appear at the 341 hearing although they almost never do. In even rarer circumstances a representative from the United States Trustee’s office may sit in on the case and monitor the answers given by you or even ask questions.

The Actual 341 Hearing:
When your name(s) is called, you will hand the Trustee your driver’s license and social security card and take the oath. After you have taken the oath you may take your seat.
All Trustees ask the same questions in a slightly different order and in a slightly different way. Trustees don’t ask embarrassing or confusing questions, they simply want to make sure they have a clear understanding of your file.

Because the Trustee is making an audio recording of the hearing it is important that you give clear, loud responses. Also, don’t nod or shake your head or mutter “uhuh” or “uhnuh”. For married couples the trustee usually asks just one person all the questions. Upon completing the questions to the first person the trustee will turn to the spouse and ask; “if I were to ask you the same questions would your answers be the same?”

Sample Questions You Will Be Asked:
  • “Did you just take the oath I administered to you?”
  • “Did you read, review and sign the Petition, Schedules, and Statement of Financial Affairs filed in your case?”
  • “Are there any amendments or changes that need to be made to your paperwork?”
  • “Have you filed another Bankruptcy in the previous 8 years?”
    • “Have you ever filed Bankruptcy using a different name or Soc. Sec. number?”
  • “Have you lived in Arizona for more than 2 years?”
  • “Have you paid back money to any family member or friend in the last year”
  • “Does anyone owe you money?”
  • “Did you list all of your assets?”
  • “Did you list all of your debts?”
  • “Do you owe anyone Spousal Maintenance (Alimony) or child support?”
  • “Did you read, sign, and return the letter you received from the Trustee?”
Once the Trustee has asked all of the general questions he or she may ask a few questions specific to your case. For instance, “are you still operating Acme, Inc.?” “does it have any accounts receivable? “does it have any inventory” or “who did you write a check to for $3000 two days before your case was filed?” It is advisable to answer the questions with a simple yes or no, if possible. This hearing is not the time to tell your life story. Trustees usually don’t care why or how you became insolvent, they only care whether or not there are assets to be administered and whether or not you are entitled to receive a discharge and since there can be more than 100 hearings scheduled for a single day they are trying to move people through as fast as possible.

Each Meeting of the Creditors lasts about 4 minutes. Once the hearing is over you are free to leave.

If you have more questions about the Arizona bankruptcy process call us for a free consultation with a bankruptcy lawyer.

1 comment:

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