Question 3 at the 341 Meeting of Creditors: Are All Your Assets and Creditors Listed on the Schedules?
This is the third in my series of posts regarding questions being asked at the 341 meeting of creditors.
Preparation is the key to a successful 341 meeting of creditors, in fact proper preparation is the key to successful bankruptcy case. It is important be ready for any question that the bankruptcy trustee throws at you. Fortunately, these questions are generally the same in all bankruptcy cases and the oddball question can be anticipated if your attorney is familiar with the documents in the case… more on that in another post.
The third question the trustee will ask you for 341 meeting of creditors is: “Are all of your assets identified on the schedules?” This is a straight forward question, but it is one that is fraught with peril. Lying to the bankruptcy trustee is very bad, you can do prison time if you are caught in a severe enough lie, and the temptation to lower the dollar amout of your assets is quite strong with this question.
You shouldn’t even be tempted to do this. If your attorney has prepared for your case (its all about preparation folks–they are going to put that on my headstone!), he or she should have identified the values of important property and determined how to handle it with the trustee.
One case I handled involved a man who had recently been divorce. She got everything except his baseball card collection. Me, being the card geek I am, was interested, and I learned that he had a 1952 Topps Mickey Mantle card among other valuable cards that were worth around $60,000. When we discussed this, he wanted to say they were worth $50 because in the end they were just pieces of cardboard with no intrisnic value. I couldn’t let him do that. I’m not going to lie to the trustee nor offend the baseball gods on the same page and he decided not to go forward with the bankruptcy case.
Do not lie! Often times even non-exempt property (property that the trustee can take and sell to pay creditors) can be resolved in the Chapter 13 plan.
The second part of this question is where attorneys get themselves in trouble. The trustee will ask: “Have you listed all of your creditors on the schedules?” For some reason, my clients tend to foul this question up, and when I figure out why I’ll fix it. The answer to this question is yes, but most of the time they give me and or the trustee a dumbfounded look. My answer always is “Yes, we pulled a credit report prior to filing this case and all creditors on the credit report and on the bankruptcy documents. If there is a creditor out there that we don’t know about and is not on the credit report who files a proof of claim, we will deal with it accordingly.”
If your attorney has done his or her preparation prior to filing the case by pulling a credit report, you can confidently answer yes.
This is one of the few questions that I can bail a client out of if they start digging a hole with their tongue, but they shouldn’t have any problems. It should go:
Trustee: Are all of your assets identified on the schedules?
Client: Yes.
Trustee: Have you listed all of your creditors on the schedules?
Client: Yes.
Next question.
If you have debt problems and you think you need bankruptcy but are terrified of the 341 meeting of creditors, don’t be. A well prepared attorney will make sure your meeting goes smoothly. When you are ready to discuss your financial worries with the most well prepared bankruptcy attorney you have ever met, please email me at jim@padebt911.com or call me at 484-221-8014 to set up a free, no-obligation consultation and you and I can prepare you for whatever the financial future may hold.
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