What Happens After a Trustee Bankruptcy Meeting?

By Tom Speranza, J.D.

What Happens After a Trustee Bankruptcy Meeting?

By Tom Speranza, J.D.

Whether you file bankruptcy under Chapter 7 of the U.S. Bankruptcy Code (a liquidation), or Chapter 13 (where you keep your assets and agree to a 36- to 60-month repayment plan), the court will appoint a trustee to supervise your case.

Two men sitting across form each other at a desk signing paperwork

Shortly after filing your case in court, your trustee will schedule a first meeting of your creditors, sometimes called a 341 meeting.

Meeting of Creditors

The 341 meeting, typically held in a conference room, takes place several weeks after the case's initial filing date. The debtor's attendance at the meeting is mandatory, but the creditors' attendance is optional. The meeting is usually brief and the trustee asks the debtor some standard questions about the debt, asset, and income schedules the debtor filed with the court.

In a Chapter 7 case, the meeting focuses on the debtor's nonexempt assets (the assets sold to repay creditors), and in a Chapter 13 case, the meeting resolves issues with the proposed repayment plan.

Post-Meeting Events in a Bankruptcy Case

After the 341 meeting, the major events and deadlines in a case proceed, beginning with court orders and finishing with discharges of debt. The list of actions are outlined below.

1. Court orders.

Soon after the meeting, the court will issue the orders for the next steps to be taken, like a Chapter 7 debtor to assemble and make available the nonexempt assets. If the trustee has some unanswered questions, a debtor can be ordered to provide additional information.

2. Statement of presumed abuse.

In Chapter 7 cases, the trustee has a 10-day period after the 341 meeting to allege the debtor is abusing the process by filing under Chapter 7 and not Chapter 13. Within 30 days after filing a Statement of Presumed Abuse, the trustee must file a motion giving direction to the court, such as a motion to terminate the Chapter 7 case, to convert the case to Chapter 13, or to permit the Chapter 7 case to proceed.

3. Nonexempt assets available.

In a Chapter 7 case, the debtor has 30 days after the 341 meeting to assemble and make the nonexempt assets (if any) for sale by the trustee for the benefit of the creditors.

4. Payment of reaffirmed debts.

In a Chapter 7 case, the debtor can reaffirm debts that would otherwise be discharged at the end of the case. If the debtor reaffirms a debt, such as a house or a car, the debtor must resume payments within 30 days after the 341 meeting.

5. Payment of nonbankruptcy debts.

In both Chapter 7 and 13 cases, the debtor must continue to pay any debts that, by law, are not dischargeable, such as child support and back taxes.

6. Debtor education/financial management class.

Under both Chapters 7 and 13, the debtor must attend a financial management class within 45 days after the 341 meeting, to help him avoid future insolvency and other financial troubles.

7. Objections from trustee or creditors.

The trustee and any creditor has 30 days after the 341 meeting to file formal objections to the debtor's case and its proposed resolution and discharge of debts.

8. Adversary proceedings.

If the trustee's or a creditor's objections are not resolved by discussion and negotiation among the parties, the trustee or creditor must file an adversary proceeding with the bankruptcy court no later than 60 days after the 341 meeting. An adversary proceeding is a separate lawsuit filed in the court by an interested party.

9. Proofs of claim.

When a debtor files a petition to begin the case, the court sends a notice of the filing to all creditors listed in the debt schedules attached to the petition. The creditors must file with the court proofs of claim confirming the debts within 70 days after the 341 meeting. If a creditor fails to meet the deadline, it waives its potential right to payment.

10. Confirmation hearing.

In a Chapter 13 case, the court reviews and approves the payment plan (or orders changes) in a confirmation hearing held within 45 days after the 341 meeting.

11. Discharge of debts.

In a Chapter 7 case, the trustee liquidates the debtor's nonexempt assets (if any) and distributes the resulting funds to the creditors based on the priorities required by the bankruptcy code. The court then discharges all remaining unpaid debts, other than those that are not dischargeable by law. The discharge of debts in a typical Chapter 7 case happens three to six months after the 341 meeting.

In a Chapter 13 case, the court discharges the remaining unpaid debts at the end of the 36- to 60-month payment plan.

If you are struggling with an unsustainable level of debt, or harassment from unpaid creditors, a legal services provider can provide advice and guide you through your legal options.

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.