We have previously discussed the legal and procedural considerations for Sec. 341 hearings (also known as the meeting of the creditors or meeting with the trustee) both here and at the National Bankruptcy Forum.  Whether held in Michigan or another state, Section 341 refers to federal law, 11 U.S.C. Section 341, which is the mandatory meeting of creditors and equity security holders. The law requires that this meeting occur within a reasonable time and it is the Bankruptcy Trustee and not a federal judge that presides over the meeting.   The Debtor must attend the meeting and should be prepared to establish his or her identity to the trustee. This is usually accomplished by bringing documents which prove identity, like a driver’s license or social security card or both. Failure to appear at the meeting may lead to Dismissal of the bankruptcy Petition by the trustee.  Although it is important to be aware of the applicable law, my recent experience at a Sec. 341 hearing in Detroit made me aware of a some important practical considerations as well.

First, it is important for the attorney and client to be early, preferably about one-half hour.  This is important because in the Eastern District of Michigan, the trustees schedule their 341 meetings in one-half hour intervals.  In other words, they schedule four or five people for 12:30 pm, four or five different people for 1:00 pm, etc.  You are expected to be there at your assigned time whether you are the first or fifth person on the list for that time.  Coming a half-hour early ensures that you will have the opportunity to observe the trustee handle several cases similar to yours before you go under oath.  This gives the attorney and client an opportunity to anticipate certain questions and generally "get a feel" for that particular trustee's style.  Arriving early is also important because several of the trustees in our district have questionnaires which must be completed before the hearing.  These questionnaires are not available online.  In other words, the questionnaire usually has to be completed that day.  Although most of the information is repetitive of what is on the petition, the questionnaire should be filled out carefully as this may be your last chance to disclose errors or omissions (particularly regarding assets or creditors that were left off the petition) before the trustee finds them on his own.  If you left something off your petition, do not panic as Fed.R.Bank.P. 1009(a) allows a "voluntary petition, list, schedule, or statement" to be "amended by the debtor as a matter of course at any time before the case is closed."

Additionally, it is worthwhile to consider completing the debtor education course prior to the 341 hearing if at all possible. Since this has to be completed before the close of the case anyway, you may as well complete it prior to the hearing just to show the trustee that you are organized and taking the process seriously. 

Finally, the importance of having all of your documentation cannot be stressed enough. In the Eastern District of Michigan, the documents you are required to bring to the 341 hearing are set forth at Local Bankruptcy Court Rule 2003-2.  This list includes, but is not limited to:  (a) Documents to support all entries on schedule I; (b) Documents to support all entries on schedule J; (c) Certificates of title for currently owned titled assets, including vehicles, boats and mobile homes (regardless of when acquired); (d) a current statement from each secured creditor (i.e., mortgages) stating the amount owed; (e) originals of bank books, check registers, other financial accounts; (f) Copies of leases, mortgages, deeds and land contracts; (g) copies of life insurance policies either owned by the debtor or insuring the debtor’s life; (h) current property tax statements; (i) asset appraisals (if any); (j) keys to non-exempt buildings and vehicles; (k) divorce judgments and property settlement agreements; (l) casualty insurance policies; and (m) the name, address and telephone number of each holder of a Domestic Support Obligation.

Although they are often short and uneventful, the 341 hearing can, in some cases, be a daunting experience.  This is likely why Detroit bankruptcy attorneys are required by local court rule to attend 341 hearings in cases where they have filed a bankruptcy petition on behalf of a client.

-Drew Broaddus