Each person who files for bankruptcy relief in Chapter 7 or Chapter 13 must attend a 341 Meeting of Creditors. The Meeting of Creditors is held 20 to 45 days after filing your bankruptcy petition. The meeting is conducted by the bankruptcy trustee assigned to administer your case.
We have several blogs discussing 341 Meetings, including:
However, you might wonder what happens after the 341 Meeting of Creditors. First, you need to complete your Debtor Education Course (a/k/a Financial Management Course) if you have not already done so.
Bankruptcy Tip: It is best to complete the second bankruptcy course before your 341 Meeting to avoid missing the deadline to complete the course!
In a Chapter 13 case, continue making monthly bankruptcy plan payments to the Chapter 13 trustee. Your bankruptcy lawyer works to resolve any objections to the bankruptcy plan to get it confirmed by the bankruptcy court. Then, you continue making your payments (usually 36 to 60 months). After paying all your payments to the Chapter 13 trustee, the trustee completes a final accounting. You should receive your bankruptcy discharge within two to three months.
In a Chapter 7 case, generally there is nothing for you to do after the 341 Meeting if you completed your Debtor Education Course and filed the certificate of completion. The only thing to do is wait for your bankruptcy discharge and the Order Closing Bankruptcy Case.
Check the video below if you'd like to hear a recent, actual experience with a 341 meeting of creditors.
Below are a few of the frequently asked questions about what happens after the 341 Meeting in a bankruptcy case:
Most Chapter 7 cases are no-asset cases. That means the Chapter 7 trustee did not take any property to sell for the unsecured creditors. Bankruptcy exemptions protect the equity in assets from being used to repay your debts. The trustee generally does not do anything else in a no-asset case.
If the trustee identifies an asset with equity, the trustee may take the asset to sell. The proceeds are used to pay your unsecured creditors. The trustee must file a motion to auction or sell the asset. They must also file numerous documents related to claims, disbursements, and accountings.
Typically, there is nothing for you to do. You receive copies of all the documents filed with the court. You should also receive your bankruptcy discharge. However, the bankruptcy case remains open until the trustee completes all of their work and files a final accounting.
If the Chapter 7 trustee abandons all assets at the 341 hearing, your money and income are yours to spend however you desire. If you are unsure of the outcome of your Chapter 7 case, as a bankruptcy lawyer or the Chapter 7 trustee.
However, do not spend money you have before the Chapter 7 341 hearing if a bankruptcy exemption does not protect it. The trustee may require you to turn that money over to the trustee’s office as an asset of the bankruptcy estate.
Chapter 13 debtors can typically spend their money however they choose, provided they make their Chapter 13 payments each month. The Chapter 13 trustee is more interested in receiving your bankruptcy payments than how you spend the rest of your money.
Bankruptcy Tip: It is generally best to wait until after receiving the Order Closing Bankruptcy Case to make large purchases, pay off debts to family members, and make luxury purchases.
You do not want to give creditors any reason to object to your bankruptcy discharge. The creditor may not be successful in having their debt protected from discharge, but objections trigger hearings. You do not receive your discharge, and your case remains open until the objection is resolved.
When you receive your bankruptcy discharge depends on several factors:
Chapter 7 Case With No Objections to Discharge
In a Chapter 7 case, most people receive their bankruptcy discharge four to six months after filing their Chapter 7 case. Therefore, you can expect your discharge order 60 to 90 days after the 341 Meeting of Creditors.
Chapter 7 Case with Objection to Discharge
A creditor could object to your discharge. If so, it takes longer to receive a discharge.
The court must conduct a hearing to determine whether the creditor has a valid legal reason for objecting. If the creditor wins, your other debts may be discharged by you would owe the creditor whose debt was not discharged.
The Chapter 7 trustee could object to your discharge. If so, the trustee asks the court to deny your entire discharge. If the trustee wins, you owe all your debts as if you never filed a Chapter 7 bankruptcy case. You need a bankruptcy attorney immediately if you filed for bankruptcy without a lawyer.
Chapter 13 Bankruptcy Discharge
You do not receive your bankruptcy discharge in a Chapter 13 case until you make all Chapter 13 plan payments. Therefore, it could take another three to five years after the 341 hearing before you receive your discharge.
NOTE: Your bankruptcy discharge does not mean the court closed your bankruptcy case.
A discharge is not the same as the order closing the case. You could receive the Order of Discharge before the Order Closing Bankruptcy Case.
The bankruptcy discharge eliminates debts eligible for a bankruptcy discharge, including most unsecured debts. It may or may not be included with the order closing the bankruptcy case. Therefore, read all orders carefully and ask a bankruptcy lawyer if you do not understand the order.
Chapter 13 debtors are prohibited from obtaining credit without court approval. A Chapter 7 debtor could apply for credit after the 341 Meeting. However, it is generally best to wait until your case is closed before applying for a credit card, loan, or new line of credit. Most creditors will not extend credit while your bankruptcy case is open.
In a Chapter 13 case, you must have court approval to purchase a vehicle if you intend to borrow money to buy a car. However, if you purchase a car with cash, you do not need court approval in Chapter 13.
NOTE: Check with your bankruptcy lawyer to ensure that the equity in the vehicle does not impact your Chapter 13 payment.
If you must purchase a car during your Chapter 7 case, wait until after the 341 hearing. Remember, your assets are subject to the bankruptcy estate. Therefore, the Chapter 7 trustee could take the car to sell it to pay your debts.
BEST CHOICE: Most Chapter 7 cases can be filed and closed within four to six months. Therefore, if possible, wait until the court closes the Chapter 7 case before you purchase a car.
Yes, you can get a new job after your bankruptcy hearing. However, in a Chapter 13 case, getting a new job could increase your Chapter 13 plan payment. Therefore, always discuss this matter with your bankruptcy attorney.
In a Chapter 7 case, getting a new job after the 341 Meeting of Creditors should not impact your case unless you commit bankruptcy fraud. The income used to determine Chapter 7 eligibility is the income earned six months before filing the Chapter 7 case.
Ascend is here to help. We provide a variety of free services to help you get the debt relief you need. If you have debts you cannot pay, call or text us at (833) 272-3631 or contact us online for a free case evaluation.