Learning that a person or business that owes you money has filed for bankruptcy is certainly not good news. However, that filing doesn’t necessarily end your chances of getting at least some of what they owe you.
Anywhere from about three weeks to two months after a bankruptcy filing, there will be a creditors’ meeting. This is also known as a 341 meeting after the Bankruptcy Code section in which it’s addressed and mandated. They’re held for Chapters 7, 11, 12 and 13 bankruptcies.
Should you attend the meeting?
The debtor is required to attend this meeting, which for most types of bankruptcies is overseen by the bankruptcy trustee. Creditors aren’t required to attend. If you choose not to attend, you don’t waive any of your rights as a creditor. The order in which creditors are paid depends on factors like whether the debt is secured or unsecured.
However, it can improve your chances of collecting some of what’s owed you. It also allows you to question the debtor about matters pertinent to their assets and debt.
The debtor is required to bring a number of documents and other information to this meeting. They must answer questions from the trustee and creditors under penalty of perjury. Most of these meetings last no more than 15 minutes. In recent years, the meetings have increasingly been held virtually via videoconference.
Make sure you’re included in the bankruptcy filing
If you’ve learned that a debtor has filed for bankruptcy, it’s crucial to make sure that you’re on the bankruptcy trustee’s list of creditors. As noted, if you are, you should receive a notice of this meeting of creditors.
If you have questions or concerns after a debtor has filed for bankruptcy or before you attend the 341 meeting, it’s smart to have experienced legal guidance. This can help you make your best efforts to collect what is owed you.