Bankruptcy creditors’ meetings, also known as Section 341 meetings, are mandatory gatherings for debtors in Madison, NJ who file for bankruptcy. It is highly recommended that you work with legal counsel to ensure the process goes smoothly and to protect your rights.
Our experienced bankruptcy attorneys can work with you to gather all necessary financial documents and prepare you for the types of questions the trustee will ask. While you must answer the trustee’s questions yourself, your attorney can be present at the meeting to provide guidance and address any complex legal issues that arise.
The bankruptcy creditors’ meeting allows the court-appointed trustee to verify the debtor’s identity and confirm the accuracy of the bankruptcy petition and schedules. This meeting is a required step for all bankruptcy filings.
The debtor (an individual or a representative of the company that filed for bankruptcy) is required to attend. They are placed under oath and asked questions about their financial situation. These meetings are not held in a courtroom, and a bankruptcy judge is not present, though meetings are now frequently conducted virtually via Zoom or over the phone. The trustee, who is an official appointed by the court, will preside over the meeting, confirming the debtor’s identity and asking questions to verify the accuracy of the bankruptcy documents.
While invited and permitted to ask questions, most creditors do not attend. However, if a creditor attends and raises an objection, a Madison lawyer will be there to protect your interests and negotiate a resolution during the meeting.
The creditors’ meeting in Madison differs significantly in purpose and procedure based on the type of bankruptcy that you file for. The primary difference lies in the ultimate goal of the bankruptcy—liquidation of assets versus repayment through a court-approved plan.
The creditors’ meeting in a Chapter 11 bankruptcy is generally more complex, as these cases often involve businesses with significant debts and assets. A Chapter 11 bankruptcy is typically for businesses (corporations, partnerships), but it is also available to individuals with complex finances or high debt. A representative from the U.S. Trustee’s office (rather than a case-specific trustee) presides over the meeting.
The meeting focuses on the debtor’s overall financial health, restructuring intentions, and the proposed reorganization plan. If the debtor is a business, questions may cover topics like business operations, property transfers within the last year, litigation involving the company, the company’s financials, and other pertinent issues. Creditor participation is more common in a Chapter 11 bankruptcy.
In Chapter 11 cases, the U.S. Trustee typically appoints a committee of unsecured creditors to act on behalf of that group. The information gathered during this meeting helps creditors and the creditors’ committee evaluate and negotiate the terms of a future reorganization plan. Following the meeting, the case moves toward proposing and voting on a final plan.
A Chapter 13 bankruptcy is an option for individuals, as well as business owners operating as sole proprietors with a regular income. For a Chapter 13 bankruptcy, the creditors’ meeting is focused on confirming the debtor’s repayment plan. A court-appointed Chapter 13 trustee presides over the meeting and the case.
The trustee will focus on the feasibility of your three- to five-year repayment plan, including your income, expenses, and ability to make the required monthly payments. The trustee will ask you questions to confirm that your plan provides for regular monthly payments and that all your disposable income is being used to pay creditors.
In addition to general financial questions, specific Chapter 13 inquiries may cover whether you are current on tax filings, have insurance on your property, and have started making plan payments. The creditors’ meeting helps the trustee and creditors determine if they will support the proposed repayment plan. Following the meeting, the court holds a separate confirmation hearing to either approve or reject the plan.
A lawyer can review your bankruptcy petition and schedules to ensure they are accurate and complete to avoid potential issues with bankruptcy creditors’ meetings in Madison. If you have questions about this process, contact Gillman Capone today. We provide a free case consultation to discuss your case and explain next steps.
Gillman Capone Law Group
N/a
