What about my Creditors?

341 Meeting of the Creditors

Usually within 30-45 days after your petition is filed, a Meeting of the Creditors called a “341 meeting”, will be held at the bankruptcy court.  The trustee assigned to the case will lead and ask questions about the contents of the bankruptcy petition.  You must be present at the meeting to answer questions under oath and under penalty of perjury about your assets, liabilities, income, and petition (unless you are on active military duty and the case is filed via proper power of attorney, or in other very limited circumstances, the trustee allows other means of communication). Most 341 meetings are uneventful and short.  Creditors are permitted to attend and to ask the debtor limited questions, under the oversight of the trustee.  Usually, only secured creditors attend.

Provided there are no issues raised at your 341 Meeting and there are no objections to the discharge of a debt, or of your claimed exemptions, the final step is to wait for your discharge, which has eligibility 60 days after the conclusion of the 341 meeting.  The trustee determines whether or not there are assets that can be liquidated and used to pay back your creditors. A “no-asset report”, which is a report of no distribution, will be filed with the bankruptcy court if the trustee determines that all your assets are exempt or is abandoning non-exempt assets.  If the trustee determines that there are non-exempt assets and is interested in them, they may be sold and the proceeds disbursed to your creditors.  You also must obtain and file your financial management course certification of completion – the second counseling course – with the court no more than 45 days after your 341 meeting. If not filed within the time fixed by the court, then your case will be closed without a discharge.

Do Creditors receive anything?

In most Chapter 7 filings, creditors do not receive any satisfaction of their claims.  This outcome contrasts with a Chapter 13 case, which requires you to participate in a repayment plan that can last no more than 5 years from the date of confirmation. This plan allows you to pay creditors as much as you can over time, as evidenced by the BAPCPA means test, your ability, and your assets.

Sixty days after your creditors’ meeting sets the deadline for creditors to formally challenge the discharge of your debt. You will receive notice of a discharge of debt shortly after 60 days if your discharge is uncontested.

A discharge means:

  • You have no further personal liability to repay the discharged debt.
  • Your creditors can never collect the debt from you.

However, a discharge does not automatically remove any lien, which is attached to your property, whether or not claimed exempt. If a lien is removable by application of bankruptcy law, this must be litigated while the case is open.

[sc:”Chapter 7 Help”]