What’s The Meeting Of Creditors Under Section 341 Of The Bankruptcy Code?

David Siegel:   Of course, the creditors have an opportunity to show up at this meeting, and witness it, ask a few questions, possibly tell the trustee about something that they may know about the debtor.  For example, if there’s property in Wisconsin that was not disclosed or an old Corvette that miraculously didn’t make the schedules.  It’s an opportunity for the trustee as well as creditors to examine the debtor under oath.  Creditors can also set up their own meetings.  That’s called a 2004 examination. In some cases the trustee does not have enough time to let the creditor ask questions forever, and the trustee will say bring your own motion, have a 2004 exam, you can examine the debtor on your own.  I’m convinced that the debtor has no assets in my opinion.

Interviewer:  I’ve actually been on either side of that.  I’ve represented a debtor in that situation, I’ve asked questions. It hasn’t gone on for a long time; just a few basic things there.

 David Siegel:  I think it’s important to note too on this topic that bankruptcy is for the honest debtor.  So as long as the debtor is being honest, and has made a full disclosure, and is not hiding anything, and hasn’t committed any kind of fraud that debtor should not worry about any of these procedures.  It’s the dishonest debtor, the one that has done something possibly shady or a nondisclosure or something of that nature.  Maybe taken advantage of a creditor, taken a loan out on false pretenses.  That’s the debtor that should worry that either the trustee – the U.S. Trustee, or a creditor can bring a motion objecting to the bankruptcy either in part or that death sentence in its entirety.