8 Tips to Rebuild Your Credit After Bankruptcy

Video of Mock of a typical Meeting of Creditors The Oregon Bankruptcy Court has produced a video of a mock Chapter 7 meeting that can be viewed by pasting this link into your web browser: https://www.youtube.com/watch?v=9uUVkWk7alU Introduction The section 341 meeting provides the United States Trustee, the standing bankruptcy trustee, creditors and other parties in interest the opportunity to ask questions of the debtor. These questions can more fully detail the debtor’s assets, liabilities, financial condition and conduct. In chapter 7, it is the standing trustees opportunity to determine if any assets are available for liquidation. In a chapter 13, it provides the standing trustees the opportunity to assess the debtor’s credibility and ability to perform under a plan. The section 341 meeting may also be the only time the debtor meets the standing trustee. The debtor’s view of the bankruptcy system may in large part be formed by this meeting, and it is important that all parties act professionally to foster the integrity of the process. It is critical that the presiding officer maintain a professional demeanor at the meeting and ensure that all parties do so. While in other situations a more familiar jocular style may put parties at ease, it is not appropriate here. Neither are comments that could be perceived as judgmental. Questioning should never become harassment. The purpose of the meeting is to determine the facts and provide an opportunity for questions, not to comment on the debtor’s lifestyle or choices. The United States Trustee may also designate additional persons to serve as presiding officers. Standing trustees with very large caseloads are often not able to preside at all meetings and still conduct their other duties. In addition, a substitute may be necessary if the standing trustee is not available to conduct meetings on a particular day. The United States Trustee monitors the standing trustee’s performance at section 341 meetings in accordance with the U.S. Trustee Program’s statutory duty to oversee the administration of cases and trustees. Timely Scheduling In some jurisdictions the bankruptcy court is responsible for scheduling the section 341 meeting, but often it is the standing trustee’s responsibility. Generally, first meetings of creditors must be scheduled between 21 days and 50 days after the order for relief. If the meeting is held in a remote location, it can be scheduled as long as 60 days afterward. The standing trustee should endeavor to conclude meetings promptly and to ensure that any adjournment of the meeting to a later date and time is properly noticed in accordance with the rules. Currently, these meetings are conducted by phone due to the COVID pandemic. Security in the Meeting Room Some standing trustees conduct meetings in a federal building or other secure facility, but not all meeting spaces have security on site. In these circumstances the standing trustee should coordinate with the United States Trustee to determine what additional actions might be taken to further enhance security. Recording the Meeting All section 341 meetings must be electronically recorded. The presiding officer must ensure that the quality of the recording is adequate such that all comments can be clearly understood and the identity of all speakers can be determined. For up to two years after conclusion of the meeting, the United States Trustee is required to provide a copy or a transcript of the recording to any member of the public, at the requester’s expense. Oath, Identity and Required Questions Administering the Oath Bankruptcy Rule 2003(b) requires debtors to be examined under oath. The presiding officer is authorized to administer that oath. If there is more than one debtor in a case, the presiding officer must administer the oath to each debtor. Verifying Debtor Identity The debtor must furnish an original government-issued photo identification as well as confirmation of his or her Social Security number. The section 341 meeting provides an opportunity for the presiding officer to verify this information. The presiding officer may not verify identity independent of the meeting, even if he or she believes that is more convenient or provides a more secure environment. The trustee should complete and send to the United States Trustee the form “Notice to United States Trustee of Debtor Identity Problem” if the Social Security number provided in the petition does not match the documentation provided by the debtor. To prevent the inadvertent release of personally identifiable information, the presiding officer should have the debtor verify his or her address and Social Security number on the record but not recite them. Required Questions The section 341 meeting provides the presiding officer the opportunity to examine the financial condition of the debtor. The presiding officer should not allow the debtor’s attorney to take over the questioning or answer on behalf of the debtor. To assist the presiding officer in consistently covering all necessary avenues of inquiry, the United States Trustee Program has developed a set of mandatory questions. The questions are not meant to limit areas of inquiry for the presiding officer, but instead serve as a starting point and a means to ensure critical areas are explored. The mandatory questions are set out below. Language Interpreters Some debtors lack sufficient proficiency in English to reasonably comprehend the inquiries of the presiding officer and creditors. The presiding officer must advise the debtor that the United States Trustee has arranged for free telephone interpreter services. The presiding officer will access the interpreter and place the interpreter under oath. Standing trustees and their employees may not serve as interpreters. The debtor who requires assistance with English must not be treated differently than other debtors. For example, presiding officers cannot reschedule meetings of creditors for those debtors requiring interpreters to the end of the day. Non-Attendance by Debtors, Attorneys All debtors are required to appear at the meeting of creditors. If there are extenuating circumstances such as illness, military service or incarceration that render a debtor unable to attend the meeting in person, the standing trustee and United States Trustee can coordinate to provide an alternative means to conduct the meeting, such as a telephonic appearance. If a debtor fails to appear, the standing trustee must either adjourn the meeting to another date or file a motion to dismiss or convert as appropriate. If an attorney fails to appear, the standing trustee should adjourn the meeting. If an attorney routinely fails to appear or otherwise fails to adequately represent clients, the standing trustee should notify the United States Trustee to discuss possible enforcement activity. Conclusion The section 341 meeting is a critical step in the successful administration of a bankruptcy case. It is an opportunity to educate the debtor on the bankruptcy process, and to allow parties in interest to question the debtor about his or her assets, liabilities and financial condition. It is also an opportunity to identify potentially fraudulent activities by those who seek to prey upon debtors. The standing trustee, as the presiding officer at the meeting of creditors, performs a critical function in protecting the integrity of the bankruptcy system. SECTION 341(a) MEETING OF CREDITORS REQUIRED STATEMENTS/QUESTIONS1 1. State your name for the record. Is the address on the petition your current address? 2. Please provide your picture ID and Social Security number card for review. a. If the documents are in agreement with the § 341(a) meeting notice, a suggested statement for the record is: “I have viewed the original State of ________ drivers license (or other type of original photo ID) and original Social Security card (or other original document used for proof) and they match the name and Social Security number on the § 341(a) meeting notice.” b. If the documents are not in agreement with the § 341(a) meeting notice, a suggested statement for the record is: “I have viewed the original Social Security card (or other original document used for proof) and the number does not match the number on the § 341(a) meeting notice. I have instructed the debtor (or debtor’s counsel) to submit to the court an amended verified statement by [date], with notice of the correct number to all creditors, the United States Trustee, and the trustee; and to file with the court a redacted copy of the notice, showing only the last four digits of the Social Security number, and a certificate of service.” c. When the documents do not match the petition, the trustee shall attempt to ascertain why and shall report the matter to the United States Trustee. d. If the debtor did not bring proof of identity and Social Security number, the trustee shall determine why. 1 These statements/questions are required. The trustee shall ensure the debtor answers the substance of each of the questions on the record. The trustee may exercise discretion and judgment in varying the wording of the statements/questions, if the substance of the questions is covered. 3. Did you sign the petition, schedules, statements, and related documents and is the signature your own? Did you read the petition, schedules, statements, and related documents before you signed them? 4. Are you personally familiar with the information contained in the petition, schedules, statements and related documents? To the best of your knowledge, is the information contained in the petition, schedules, statements, and related documents true and correct? Are there any errors or omissions to bring to my attention at this time? 5. Are all of your assets identified on the schedules? Have you listed all of your creditors on the schedules? 6. Have you previously filed bankruptcy? (If so, the trustee must obtain the case number and the discharge information to determine the debtor(s) discharge eligibility.) 7. What is the address of your current employer? 8. Is the copy of the tax return you provided a true copy of the most recent tax return you filed? 9. Do you have a domestic support obligation? To whom? Please provide the claimant’s address and telephone number, but do not state it on the record. Are you current on your post-petition domestic support obligations? 10. Have you filed all required tax returns for the past four years? SAMPLE GENERAL QUESTIONS (To be asked when deemed appropriate.) 1. Do you own or have any interest whatsoever in any real estate? If owned: When did you purchase the property? How much did the property cost? What are the mortgages encumbering it? What do you estimate the present value of the property to be? Is that the whole value or your share? How did you arrive at that value? If renting: Have you ever owned the property in which you live and/or is its owner in any way related to you? 2. Have you made any transfers of any property or given any property away within the last one year period (or such longer period as applicable under state law)? If yes: What did you transfer? To whom was it transferred? What did you receive in exchange? What did you do with the funds? 3. Does anyone hold property belonging to you? If yes: Who holds the property and what is it? What is its value? 4. Do you have a claim against anyone or any business? If there are large medical debts, are the medical bills from injury? Are you the plaintiff in any lawsuit? What is the status of each case and who is representing you? 5. Are you entitled to life insurance proceeds or an inheritance as a result of someone’s death? If yes: Please explain the details. If you become a beneficiary of anyone’s estate within six months of the date your bankruptcy petition was filed, the trustee must be advised within ten days through your counsel of the nature and extent of the property you will receive. FRBP 1007(h) 6. Does anyone owe you money? If yes: Is the money collectible? Why haven’t you collected it? Who owes the money and where are they? 7. Have you made any large payments, over $600, to anyone in the past year? 8. Were federal income tax returns filed on a timely basis? When was the last return filed? Do you have copies of the federal income tax returns? At the time of the filing of your petition, were you entitled to a tax refund from the federal or state government ? If yes: Inquire as to amounts. 9. Do you have a bank account, either checking or savings? If yes: In what banks and what were the balances as of the date you filed your petition? 10. When you filed your petition, did you have: a. any cash on hand? b. any U.S. savings bonds? c. any other stocks or bonds? d. any certificates of deposit? e. a safe deposit box in your name or in anyone else's name? 11. Do you own an automobile? If yes: What is the year, make, and value? Do you owe any money on it? Is it insured? 12. Are you the owner of any cash value life insurance policies? If yes: State the name of the company, face amount of the policy, cash surrender value, if any, and the beneficiaries. 13. Do you have any winning lottery tickets? 14. Do you anticipate that you might realize any property, cash or otherwise, as a result of a divorce or separation proceeding? 15. Have you been engaged in any business during the last six years? If yes: Where and when? What happened to the assets of the business?