The Clients’ Fear of the Meeting of Creditors…Is It An Interrogation?
The average client who comes into the office has no idea how the bankruptcy process works. They are entering unknown territory and many fear not only the filing of a bankruptcy in general, but also the actual process involved. Bankruptcy involves going to court! There will be judges! There will be a lot of stress!
Attorneys, in their day-to-day work in the profession, prove another hurdle for clients because we speak a foreign language. We see the inner-workings of cases. We know the lingo. We speak in terms of Debtors and Creditors or Discharge and Exemptions. The problem is…our clients do not. We inadvertently add to the anxiety if we don’t educate those that we represent.
The one thing that tends to strike fear into the hearts of clients almost universally, in my practice, is the 341 Meeting of Creditors. It sounds imposing when you detach yourself from years of practice, doesn’t it? As attorneys, we see this and think nothing of it. We see it as a routine hearing. But what about the clients? A client who has not been informed as to what the Meeting of Creditors actually is tends to have an intense fear of the hearing. To them, it sounds menacing. Are my creditors all going to be there? Are they going to block my bankruptcy? Are they going to interrogate me? Will the “judge” interrogate me? These are all questions that I have heard in my years of practice.
People hire a bankruptcy attorney to help reduce stress, not to make things more stressful. This is why I always inform the client of what to expect in the process when the case is signed and filed. I prepare the client for the 341 Meeting of Creditors by first, frankly, making fun of the name of the hearing. It’s really more imposing than it sounds. In the hundreds of 341 meetings that I have attended while representing clients, I have only had a handful in which a creditor actually showed up. It’s a rarity. It’s not a panel of your creditors waiting to attack you. It is the rare case that creditors show up and want to question a Debtor.
I explain the process to the clients. The 341 Meeting of Creditors is not an interrogation. I explain that it is not before a judge. The Chapter 13 and/or Chapter 7 341 Meeting of Creditors is before a Trustee. That Trustee, I explain, acts more as a gate-keeper. They are there to ensure that everything is accurate. Questions are asked to verify things that we placed in the petition and to confirm the accuracy of the petition, or to advise of any changes that are needed, on the record. The Trustee is there to ensure that the bankruptcy, as filed, is fair to all parties. They ensure that creditors do not overstep their bounds, but at the same time they also ensure that all creditors are treated fairly by the filing. I inform the clients that this is why it is important to provide the best, most accurate information to me during the preparation of the case. A good bankruptcy attorney will have prepared the case in the best possible manner with the information given to them by the client. If all has been prepared correctly and all information given during preparation is complete and accurate, the actual hearing is a very short ordeal.
I find that explaining how this hearing works tends to deflect many of the anxieties of clients. It is always nice to hear a client leave the meeting with you only to say “that was it?” Careful preparation of the case, followed by a short education in layman’s terms about the process, make the 341 Meeting less feared.