What Is a 341 Meeting and How Do I Prepare? 

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Filing for bankruptcy is a huge decision. And while filing for a Chapter 7 or Chapter 13 bankruptcy can provide you with the financial relief that you need, the process requires multiple steps that can be confusing to the layperson. One of the most important parts of a bankruptcy case is the 341 meeting, which occurs after you’ve filed for a Chapter 7 or Chapter 13 bankruptcy. Consider the following information regarding what you should know about a 341 meeting and how to prepare for your own 341 meeting—

What Is a 341 Meeting?

A 341 meeting, also known as a meeting of creditors or 341 hearing, is an important part of a Chapter 7 and Chapter 13 bankruptcy case. During this meeting, a debtor and their creditors will meet; the court-appointed bankruptcy trustee is also required to attend this meeting. The purpose of the 341 meeting is to establish the facts of the bankruptcy case, facilitate the negotiation and decision regarding a repayment plan, and ensure that all of the paperwork and details of the bankruptcy case are in order. 

The 341 meeting is a good opportunity for creditors to ask questions of the debtor should they have any, such as whether the debtor has any undisclosed income or assets. For the debtor, the primary purpose of the meeting is to authenticate their identity and establish their financial circumstances. 

Do I Need an Attorney for a 341 Meeting?

Attorneys are welcome to attend 341 meetings, but they are not legally required to partake. The only parties who are legally required to be at a 341 hearing are the court-appointed trustee and the debtors; even creditors aren’t legally required to attend, although they may choose to do so. 

While having your attorney present at your 341 meeting may not be required, it is often advised. Indeed, throughout the entire bankruptcy process, working with a legal professional who understands the law and how to represent your best interests throughout the process is recommended, as these types of cases are complex and can even be contested. 

How to Prepare for a 341 Meeting

After you file for bankruptcy, your attorney can provide you with more information about how to prepare for your upcoming 341 meeting. Some steps to both expect and take include:

  • You will receive a copy of the file petition for bankruptcy, schedules, and other documents to review. You should review these in full (with your attorney) and ensure that they are accurate. If you notice any errors or discrepancies, you need to inform the bankruptcy trustee immediately. 
  • Prepare your documents verifying your identification, including your driver’s license or state I.D., Social Security card, or/and any other required identification documents. 
  • Confirm the details of the time and location of your hearing. During the COVID-19 pandemic, these hearings were often occurring by phone. Verify whether your hearing will be in person or conducted virtually. It’s important that you show up to the hearing on time and are fully present (i.e., silence your phone). 
  • Prepare for questions that you may receive from the trustee or creditors. Examples of common questions include:
    • Did you sign the petition of your own accord and will?
    • Is the address on the petition accurate? 
    • Have you read the petition and schedules prior to signing? 
    • Have all of your assets and income been listed in the schedules?
    • Have you filed for bankruptcy in the past? 
    • Do you have any support obligations, such as child support or spousal support?
    • Is there anyone who owes you money?
    • Do you anticipate receiving any assets from a civil case that have not yet been disclosed?
    • Are you involved in any other civil actions at this time? 

What Happens After a 341 Meeting?

341 hearings are fast. In fact, there may be several 341 meetings scheduled to take place within a single hour, which means that your hearing may conclude in as few as 10 minutes or less. 

What happens next will vary slightly depending on whether you are filing for a Chapter 7 or a Chapter 13 bankruptcy. 

For Chapter 7 debtors, the next step is attending the required debtor education courses. After these courses have been completed and a certificate of completion has been filed with the court, the discharge of debts should occur within approximately 60 days. For Chapter 13 debtors, the Chapter 13 repayment plan must be approved. Chapter 13 filers are also required to take a debtor education course.

In most cases, 341 meetings are fast and straightforward. Most holdups relate to misspelled names on official documents, so it’s important to ensure that the information on all documents exactly matches the information on your identification. If you have more questions, the bankruptcy trustee assigned to your case and your attorney are both great resources. 

Will My Car Be Repossessed If I File for Bankruptcy?

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Depending on where you live, it’s often a necessity to own a car for work, school, and other daily necessities. When you’re struggling to make ends meet, you might fall behind on your vehicle payments in addition to some other credit accounts. Having your car repossessed would make a stressful situation even worse. 

Repossession of a vehicle can be upsetting under any circumstances. If you are thinking about filing for bankruptcy, can the lender still repossess your car? And, if your car has already been repossessed, will bankruptcy help you get it back? Here’s what you need to know. 

Filing Bankruptcy to Save Your Car

Car loans use the vehicle as collateral, meaning the lender has the right to repossess the property if you don’t make your payments. In fact, vehicle repossession can happen as soon as missing two car payments. 

If you file bankruptcy before a lender repossesses your car, this will put an automatic stay on debt collectors. Repossession proceedings will stop. But bankruptcy isn’t a means to get a free car. 

Bankruptcy, whether you file Chapter 7 or Chapter 13, will give you relief from unsecured debt. A car loan is considered secured debt. In most cases, the debt relief you receive will help free up cash so that you can catch up on your loan payments and save your car. But neither type of bankruptcy will help you keep a vehicle that you can’t afford. That said, the type of personal bankruptcy you file could impact how much you have to pay. 

Chapter 7 Bankruptcy

You may be able to work with your lender in some situations to refinance or modify your loan. If you can come to an agreement with your lender during the Chapter 7 bankruptcy process, you will likely need to sign a reaffirmation agreement outlining the new terms. When you sign this form after you file for bankruptcy, the lender has “refreshed” their right to repossess the vehicle if you don’t adhere to your end of the deal. 

Chapter 13 Bankruptcy

Chapter 13 bankruptcy involves a repayment plan that lasts anywhere from three to five years. Your vehicle loan can be included in this plan, giving you reduced payments at a lower interest rate. This can make your car more affordable and less likely to get repossessed. 

Using Redemption or Reinstatement After Repossession

Assuming your car has already been repossessed, you may or may not be able to get it back through the bankruptcy process. If you do nothing or wait too long, the vehicle will be sold at auction. If it is sent to auction and the lender gets less than you owe for it, you’ll be presented with a loan deficiency, which is a bill for the difference. Again, the type of bankruptcy you file can impact your situation with a car that’s already been repossessed. 

Chapter 7 Bankruptcy

If you want to get the car back and it’s still available, you will need to pay what you owe to the lender. You may also have the opportunity to reaffirm the loan and negotiate more favorable terms. 

If you don’t want the car back or it’s already been sold, you can include the vehicle loan deficiency in your bankruptcy. It becomes an unsecured debt, meaning you’ll likely be able to get it discharged. 

Chapter 13 Bankruptcy

If your vehicle has been repossessed and you want it back, Chapter 13 is also an option. But it only makes sense if you are also filing to keep your home and other valuable assets. With this type of bankruptcy, you will negotiate an affordable payment plan with your creditors over the next three to five years. 

Protecting Your Car Equity in Personal Bankruptcy

When you file for Chapter 7 bankruptcy and wish to keep your vehicle, you also have to be concerned with your car’s equity. You are only permitted to keep so much property in a Chapter 7 bankruptcy. Otherwise, the trustee will sell non-exempt items to raise cash for creditors. 

Most states have motor vehicle exemptions allowing you to keep a certain amount of a car’s equity. You may also be able to use part of a wildcard exemption to meet the requirement to keep your vehicle. 

If you have overdue payments or equity you are unable to protect, you may be better off filing for Chapter 13 bankruptcy. You can catch up on your payments with the repayment plan and maintain possession of the car. 

If you are concerned about your transportation options or have questions about a vehicle repossession, an experienced bankruptcy attorney can give you the information you need. Gulf Coast Bankruptcy Attorney is dedicated to providing residents of the Gulf Coast with the resources necessary to make informed decisions about their financial future. 

What is the Difference Between Chapter 7 and Chapter 13? 

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If you’re struggling financially and have tried things like credit counseling or selling off some assets, you may be considering bankruptcy as your next option. Do a little more research, and you’ll soon discover that there are several different types of bankruptcy available to individuals: Chapter 7 and Chapter 13. Before you can move forward, you’ll want to understand the differences between Chapter 7 and Chapter 13 bankruptcy, so you make the right choice. 

What is Chapter 7 Bankruptcy?

Chapter 7 of the U.S. Bankruptcy Code is intended for people with limited assets, income, or both. To qualify for Chapter 7, you must pass a means test showing that your income falls below an established number for your state. Even if you don’t pass the means test at first glance, you may still be able to qualify. If you are able to file for Chapter 7 bankruptcy, you will be able to wipe out your unsecured debts like medical bills and credit cards. 

How Chapter 7 Bankruptcy Works

As soon as you file for Chapter 7 bankruptcy, the court will assign a trustee to your case. One of the trustee’s duties is to liquidate some of your assets to pay off creditors. Some of the property that a trustee can liquidate includes:

  • Bank accounts
  • Cash
  • Investments
  • A second home
  • A second vehicle

Some of your assets will be safe from liquidation due to exemptions available under Chapter 7 bankruptcy. These vary by state. For example, in Mississippi, a person can exempt $10,000 of certain types of personal property during bankruptcy. 

What is Chapter 13 Bankruptcy?

Chapter 13 of the U.S. Bankruptcy Code restructures debt and can also wipe some of it clean to give you a more manageable financial outcome. You won’t be asked to liquidate any assets with Chapter 13 bankruptcy because the court will require that you continue to make payments on your debts. This type of bankruptcy works best for people who have steady income, want to avoid asset liquidation, and don’t qualify for Chapter 7. 

How Chapter 13 Bankruptcy Works

When you file for Chapter 13 bankruptcy, you will be assigned a trustee who will help you create a payment plan for your debts as well as schedule a meeting with your creditors. The repayment period for a Chapter 13 bankruptcy lasts from three to five years. Your plan’s terms will depend on your debts and income. Once you complete the repayment plan, any remaining debts will be completely discharged. 

Similarities Between Chapter 7 and Chapter 13 Bankruptcy

If you are trying to make up your mind between filing for Chapter 7 and Chapter 13 bankruptcy, you’ll be happy to know that both have several similarities. Among them are:

Automatic Stay

If you’re in financial trouble, you are probably being harassed by creditors or collection agencies. Both types of bankruptcy include an automatic stay which prohibits any creditor from attempting to collect a debt. They must also stop any repossession, foreclosure, or garnishment actions. 

Discharge of Debt

Both types of bankruptcy will help you eliminate unsecured debt. But you will have to continue paying your debts with Chapter 13 bankruptcy for several years before you can receive a discharge. 

Protection of Property

You get protection of income and property with both Chapter 7 and Chapter 13 bankruptcy. Both offer exemptions, such as a home or car, that won’t be included in your bankruptcy. 

Differences Between Chapter 7 and Chapter 13 Bankruptcy

It’s important to understand that there are several key differences between Chapter 7 and Chapter 13 bankruptcy. Among the main differences are:

Qualification

Qualifying for bankruptcy is different with Chapter 7 versus Chapter 13. You must pass a means test with Chapter 7. But this isn’t a requirement with Chapter 13. 

Time to Discharge

When you file for Chapter 7 bankruptcy, your case can be concluded, and your unsecured debts wiped out in just a few months. With Chapter 13 bankruptcy, you must wait three to five years to get a bankruptcy discharge. 

Repayment of Debts

You won’t be required to make any additional payment on your debts with Chapter 7 bankruptcy after liquidation and discharge. But you will have to continue to make agreed-upon payments with Chapter 13 for multiple years. 

At Gulf Coast Bankruptcy Attorney, our mission is to provide those who are struggling with debt the information they need to make informed decisions about their financial future.