All individuals and businesses that file for bankruptcy protection will eventually face a meeting of creditors. Also known as a 341 meeting, this meeting is required under the Bankruptcy Code. The broad purpose of the meeting is to ensure that the filing entity has fairly and honestly represented its assets and liabilities to the creditors. If you will soon be facing a 341 meeting, you should contact an experienced attorney, like a bankruptcy attorney to further discuss your legal rights and options.

341 Meetings Are About Fact-Finding

Businesses are required to send at least one representative to the meeting of creditors and equity security holders. All creditors that are included in the bankruptcy filing will be notified that the meeting is occurring. While they are entitled to attend the meeting as well, very few creditors actually choose to do so. This is because there is simply not much that a creditor can do at a 341 meeting.

In some particularly complex bankruptcy cases, such as when a large company files for Chapter 11 protection, creditors may wish to attend the meeting in order to get a better idea of how the firm plans to reorganize itself. During the meeting, the debtor will be asked many specific questions about their financial claims and will be required to provide verification.

While these meetings are very important, they should not be thought of as interrogations. Instead, a 341 meeting is better viewed as a fact-finding operation. Still, individuals and businesses should always be represented by a bankruptcy attorney at a 341 meeting. Your attorney can help ensure that everything proceeds correctly and that any inconsistencies within the record is cleared up without issue.

What Happens After a Meeting of Creditors?

After the completion of the meeting, what happens next will depend entirely on the facts of your individual case. For example, if your business is a modest-sized sole proprietorship, and you have filed for Chapter 7 bankruptcy, the meeting of creditors may be the very last step of the process. Your debt may then be discharged after the 60 day wait period. On the other hand, if your business is a corporation that has filed for Chapter 7, you will still need to go through the liquidation process. This means that your company will need to be dissolved in accordance with state law.

If you filed for Chapter 13 bankruptcy or your company filed for Chapter 11 bankruptcy, the reorganization process still needs to occur. In a Chapter 11 case, no discharge of debts will take place until a company’s reorganization plan has been confirmed.