The meeting of creditors (also called the 341 hearing) is a mandatory hearing almost all bankruptcy debtors must attend. At the 341 hearing, creditors have the right to ask you questions under oath about your bankruptcy papers and financial affairs. But in most cases, creditors rarely attend 341 hearings. Read on to learn more about when a creditor might appear.
When you file for bankruptcy, you must disclose all of your creditors in your bankruptcy papers. In addition to listing your creditors' contact information in your bankruptcy schedules, you must submit a creditor mailing list (also called a creditor matrix) to the court. After filing the case, the court sends notice of your bankruptcy matter and the 341 hearing date to all of the creditors listed on the creditor matrix.
In most instances, creditors will not show up to the 341 hearing. The majority of Chapter 7 bankruptcy cases are "no-asset" cases—there's no property or assets to distribute and, therefore, no issues to explore. Also, most cases don't involve fraud or debts that a creditor can argue shouldn't be discharged (wiped out). Finally, the cost of hiring an attorney or coming to the hearing outweighs its benefit—especially because the creditor can still file an objection to discharge or an objection to confirmation of your Chapter 13 plan even if they don't attend the hearing.
Even though it is unlikely that any creditors will come to your 341 hearing, it can happen. But it's doubtful that you'll be surprised. Most people have reason to suspect that a creditor might show up. For instance, creditors will attend the 341 hearing if the creditor:
If a problem exists, many debtors avoid a motion or adversary proceeding (bankruptcy lawsuit) by negotiating a solution with the creditor informally.
Keep in mind that creditors can still object to your discharge or object to your Chapter 13 plan even if they didn't show up to the meeting of creditors. If you commit bankruptcy fraud or incur debts shortly before filing for bankruptcy—known as presumptive fraud—creditors could have grounds to file objections in your case.
However, it's generally a good sign if no creditors come to your 341 hearing. If this occurs, and the bankruptcy trustee appointed to your case is satisfied with your answers to questions posed at the 341 meeting of creditors, the trustee will conclude the hearing.
Learn what happens after the 341 meeting of creditors in a Chapter 7 case.