The meeting of the creditors that occurs at the beginning of a New York bankruptcy case shortly after it’s filed is one of the few times the debtor must appear at the bankruptcy court. Moreover, the creditors themselves are rarely present, and the meeting itself is conducted by the trustee, who will question the debtor on various topics. Debtors often want to know what the trustee will ask, and section 341 of the Bankruptcy Code requires these four in a chapter 7 case:
(1) Are you aware of the “potential consequences of seeking a discharge in bankruptcy, including the effects on credit history?”
(2) Do you know you are able to “file a petition under a different chapter of this title [meaning the Bankruptcy Code]?
(3) Do you know what the effects of “receiving a discharge of debts under this title” are?
(4) Do you know what the effect of “reaffirming a debt” is?
These four questions are usually not the ones debtors expect to be asked when they wonder what will happen at their 341 meeting of creditors. Instead they appear more directed at discouraging debtors from continuing through the process. The “potential consequences” of seeking a discharge aren’t the same as the actual consequence of obtaining one. In fact, by the time debtors attend their meetings of the creditors, the bankruptcy notation will be on their credit reports, so the question doesn’t really have much of a point.
The second question is clearly aimed at deterring debtors from discharging their debts by encouraging them to reconsider by refiling in a different chapter (almost certainly chapter 13). Debtors in other chapters are not asked this question.
The last two questions are more sensible. Question three seems to ask whether debtors are sure discharge is the remedy they want for their problems. It may be condescending, but it can also weed out people who don’t know what they’re doing by filing bankruptcy. Question four reminds debtors that once they sign reaffirmation agreements, the debts they’re subject to will not be discharged and won’t be for at least another eight years.
In reality, New York bankruptcy trustees rarely ask these questions. They usually ask debtors if they’ve read the information sheet that contains these questions and if they understand them. They then go on to ask about assets and income, as one would expect. Thus, these aren’t the only questions trustees ask debtors during the 341 meeting, but they are the ones the trustee is required to ask by statute., which they do in some form or another. For more questions trustees ask read this post about what will happen at your 341 meeting of creditors in New York.
For answers to more questions about bankruptcy, the automatic stay, effective strategies for dealing with foreclosure, and protecting your assets in bankruptcy please feel free to contact experienced bankruptcy attorney Brooklyn NY Bruce Weiner for a free initial consultation.
