Take a moment for as Attorney Deanne Koll explains what occurs at a 341 Hearing, who can attend, and why you may be interested as the lender.
Disclaimer: This video is designed to be educational and informative, but it is not legal advice. Collection law is constantly evolving and subject to change. Each situation is unique, and each case should be addressed to fit the unique situation.
The 341 Hearing in bankruptcy—sometimes referred to as the “Meeting of the Creditors” — is an informal hearing scheduled for the debtor to appear.
At this hearing, the bankruptcy trustee questions the debtor, under oath, about information in the bankruptcy schedules and about the debtor’s general financial dealings. Any creditor who wishes to appear may do so and has a limited right to question the debtor while under oath.
It is uncommon for creditors to appear at a 341 Hearing. However, this hearing can be useful for creditors who believe the debtor has potentially made fraudulent statements or committed other acts which may affect the dischargeability of a debt.
For example, if the creditor believes that the debtor has potentially sold collateral encumbered by the creditor’s security interest, it may be useful to attend the hearing and question the debtor about the location of that collateral.
Or, it may be useful –if the creditor believes that the debtor has assets which were not properly disclosed in the bankruptcy schedules –to attend the hearing to apprise the trustee of these issues.
Possible attendance at this hearing should be discussed with your attorney.