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The idea of filing for bankruptcy can be overwhelming. However, it can prove to be a positive step if you are experiencing unmanageable debt. When you file for Chapter 7 bankruptcy, a 341 meeting is held with your creditors and trustee to determine how to proceed with your remaining debt. Here we review who is involved and what takes place at a 341 meeting.
Chapter 7 is a type of consumer bankruptcy known as “fresh start” or “liquidation” bankruptcy. It specifies how debts are repaid with “unsecured priority debts” given first priority. This would include child support or unpaid taxes. Next, comes secured debts such as car loans and then unsecured debts such as credit cards or medical bills. An unbiased trustee is appointed by the court to manage the process, including reviewing your finances and assets. This helps determine if you have assets that can be sold to pay off your debt. When you file for Chapter 7, you generally do not appear in court but instead attend a 341 meeting.
The 341 meeting usually takes place four to six weeks following a debtor filing for bankruptcy. The meeting is attended by the debtor, the trustee, and potentially the creditors. It is optional for creditors to attend. The meeting refers to section 341 of the bankruptcy code. At the meeting, paperwork is reviewed, and the trustee determines if you have any assets to liquidate or if a debtor is attempting bankruptcy fraud. The review of nonexempt assets available is to pay your outstanding debts as stated above.
Bankruptcy fraud comes in four common forms:
During the meeting, your trustee and lawyer can help establish you are filing in good faith. All attending creditors will have had time to review the bankruptcy paperwork and their own financial records regarding your payment history.
A typical meeting will include the following:
Being prepared with all the above information will help make the process easier and ensure there is nothing that can be misconstrued as false or misleading. A bankruptcy attorney can also help prepare for your 341 meeting and be there to represent you.