F is for First Meeting (aka 341 Meeting)

F is for First Meeting (aka 341 Meeting)

If the hardest part about filing bankruptcy is deciding to file, the second most difficult part, for most people, is attending the 341 Meeting of Creditors, or First Meeting.  Anxiety and nervousness is often misplaced, as the 341 Meeting is serious, but should not be frightening.  The purpose of this post is to dispel some of the mystery surrounding the 341 Meeting.  To get it out of the way, the name, “First Meeting” is a misnomer —  there are no additional meetings.  For this reason, we often just call it the 341 Meeting, as it is set pursuant to §341 of the Bankruptcy Code.

The 341 Meeting typically takes place about 30 days after the case has been filed.

The 341 Meeting is NOT court.  You are not in trouble, there is no judge, and there is no judgement being made regarding whether filing bankruptcy was the right thing for you (i.e., whether you

Once inside, you can go to the second floor in the gold elevator.

The 341 Meeting Room is ACROSS the street from the US Bankruptcy Court & Post Office (pictured bottom right). Parking can be difficult, so arrive early. Enter in the green building (upper right) through at 402 Trade Street (left).

“qualify”).  However, it is as close as most clients get to “going to court.”  This is because it can happen in a Courthouse (Statesville Chapter 7 341 meetings happen at the U.S. Courthouse, at 200 West Broad Street, Room 301, Statesville, NC 28677) although, they do not have to (All Chapter 13 341 Meetings take place in our office and for Charlotte Chapter 7s, in the U.S. Bankruptcy Administrator’s Office, 402 West Trade Street, Suite 205, Charlotte, NC 28202, across from the Federal Courthouse).  Judges are not present.  However, your Trustee will be present and your attorney will be with you.

Creditors may, but very rarely do, attend the 341 Meeting.  It would be extraordinarily rare (but not necessarily bad) to see a representative of Bank of America or Chase at the 341.  The most common time when creditors appear is when a person has a small business and they owe another small business money.  Even if they do appear, the 341 Meeting is for clarifying facts, not challenges.

Most 341 Meetings are solely between the person who filed (the debtor) and the Trustee.  The Trustee calls the debtor’s name, the debtor comes to the table where he is sworn in.  The meeting is recorded.  The Trustee asks questions about the contents of the bankruptcy petition, and has pretty broad discretion regarding what may be requested (a copy or the 341 Meeting Trustee guidelines are here).  In most instances, the questions are typically the following:

  • Did you read the petition before filing?
  • Did you sign the petition before filing?
  • Did you list all of your assets?
  • Did you list all of your debts?
  • Are the schedules and statements true and accurate?
  • Do you have any amendments?
  • Do you have any domestic support obligations?
  • Have you read the Bankruptcy Information Sheet provided by the Trustee (Charlotte only)?
Statesville 341 Meeting Location

Rather stately and recently refurbished, the Chapter 7 341 Meetings for Statesville North Carolina are held in the old U.S. Post Office Building. You will have to go through security, so remember to leave all phones and pocket knives in your car.

Sometimes, if there are exposed assets because the exemptions did not protect all of a debtor’s things, the Trustee will discuss the amount of exposed equity and how to repay the creditors, although that is typically discussed between the attorney and the Trustee at a later date.

Although it may be intimidating, keeping the following rules in mind will help ensure that the meeting is as painless as possible:

1. Tell the truth

2. Listen carefully to the FULL question before answering.

3. Answer in as few words as possible.

4. Don’t explain, expand, justify or speculate unless your attorney encourages you to do so.

5. If your attorney starts talking, you stop talking.

This is NOT a test or an interrogation — the purpose is to validate the information in the bankruptcy papers under oath (which should not be a problem, as the petition has been reviewed a number of times before it was filed) and to provide the Trustee with information needed to determine if the exemptions are sufficient to protect assets (which your attorney should already know before filing).  Clients do not “mess everything up” at a 341 Meeting, but they do sometimes work themselves into a ball of anxiety ahead of time, and that is not necessary.  In the Western District of North Carolina, 341 Meetings are typically quite short and the Trustee and your attorney exchange much of the documentation before or after the 341 Meeting.  Therefore, you do not need to bring anything other than identification unless your attorney has instructed you otherwise.

Finally, remember to bring identification (Drivers License is fine), leave your phone in your car (it is not allowed in Court Rooms), dress like you’re going to church, and trust that your attorney is there to help you.

But isn’t Bankruptcy Federal?

It is common that clients search for information about their case online.  They don’t want to “bother” their attorneys, they don’t trust their attorneys, or, sometimes, they do not have a bankruptcy attorney.  As a result, they search for “bankruptcy law” and whatever specific topic they are curious about: losing a house, rebuilding credit, keeping a car, ruining lives, etc.  Even if they enter a specific zip code or location, they still may find results from all over the United States, not just North Carolina or, more specifically, the Statesville or Charlotte division of the Western District of North Carolina.  They then read everything they can without realizing that bankruptcy is different from place to place.

Collum & Perry is located in Mooresville, North Carolina, just north of Charlotte.  For that reason, most of our cases are filed in the Western District of North Carolina, although we can also file cases in the Middle District of North Carolina, but North Carolina has four districts total.  Even within the Western District, we file cases in the Statesville Division, the Shelby Division and the Charlotte Division.  Each division has slightly different ways of doing things, each District has significantly different ways of doing things, and the differences from state to state are even more substantial.

For example, in North Carolina, there is a Bankruptcy Administrator (or BA).  The Western District’s BA is Linda Simpson. The BA oversees all of the Trustees in an effort to maintain the integrity of their work.  She also reviews and approves pre-filing credit counseling course and financial management courses.  In every other state, except Alabama, there is a US Trustee, who is part of the Justice Department.

Within North Carolina, there are differences between districts.  In the Western District of North Carolina, there is no confirmation hearing.  Clients are often comforted to hear that they will not have to attend Court or be in front of a judge.  However, in the other districts of North Carolina, there are confirmation hearings. While neither system is necessarily better, they are different.

Further, within the Western District of North Carolina, there are a number of divisions.  The Statesville Division of the Western District of North Carolina includes certain counties (Iredell, Wilkes, Alexandra, Catawba, Caldwell, Watauga, Ashe, and Allegany), the Charlotte Division has certain counties (Gaston, Mecklenburg, Union and Aneon), the Asheville Division has others (Transylvania, Henderson, Buncombe, Yancy, Mitchell, Avery, Madison and Haywood), and the Bryson City division captures the remaining (Swain, Graham, Cherokee, Clay, Macon and Jackson).  You can see a map here.  So, if a couple lives in zip code 28115, they will file in the Statesville division.  If they file a Chapter 13, Mr. Steven Tate will be their Chapter 13 Trustee.  If they filed a Chapter 7, they would have one of a number of different Trustees.  However, if a couple’s zip code were 28078, they would file in the Charlotte Division.  They would have Mr. Warren Tadlock as their Chapter 13 Trustee.  Someone in the Statesville Division would NEVER have the same Chapter 13 Trustee as someone in the Charlotte Division.  However,if someone files a Chapter 7 Trustee in the Statesville Division, Wayne Sigmon may be the Trustee and he is also the Trustee in Charlotte division cases.

A map of the districts in North Carolina. We are located in the Western District but also have attorneys who practice in the Middle District.

What’s the point?  Essentially, every Trustee has different approaches and requirements.  Every district has different local rules and regulation.  Each state has different laws that apply.  So, even though Bankruptcy law is Federal, the wide variety of differences make it very important to hire an attorney and ask your attorney to help you with any aspect of your bankruptcy case.  Online searching is great, but cannot replace a knowledgeable, experienced attorney who advocates for you and knows the local rules!  Here at Collum & Perry, our office strives to assist all of our clients in achieving the best possible result from what is otherwise an untenable situation.