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In all bankruptcy cases there will be a required meeting this is often called the “meeting of the creditors” or the “§341 meeting.” The Case Trustee will conduct the meeting. She represents the interests of all the creditors in the case and is also in charge of administering the debtor’s bankruptcy estate.

All of the Debtor’s creditors are invited to attend the meeting. However, it is very unlikely that a creditor will appear at the meeting in consumer cases. Almost all creditors are satisfied that the Case Trustee will properly examine the Debtor.

In consumer cases the meeting last only 5 – 15 minutes. Typically attendees of the meeting include the Debtor, Debtor’s attorney, and the Case Trustee. During the meeting the Case Trustee will ask the Debtor several questions regarding her financial affairs. The purpose of the examination is to ensure that the Debtor has fairly and honestly represented her assets, income, and debts in the bankruptcy filing.

Typical questions the Case Trustee may ask the Debtor include:

• “Did you review your bankruptcy filing with your lawyer prior to authorizing him to file it?”

• “Have you listed all your assets in your bankruptcy filing?”

• “Could you sue someone for any reason, including a personal injury claim?”

• “Have you given anything worth more than $1,000 to anyone in the last year?”

• “Have you bought or sold any property in the last year worth more than $1,000?”

• “Have you made any one single payment to a creditor of more than $600 in the last 90 days?”

·         “Do you expect to receive any inheritance?”

Currently in Massachusetts the meetings are not held in the Court House. A judge is never present, no one is called to a witness stand, and it is not adversarial in nature. The meetings are an informal and open process.

Many times when facing insolvency issues a debtor, either a business or individual, will look to pay one creditor over another, this is called a preference. If the payment was not in the ordinary course of business and the transaction occurred within the 90 days prior to the date of filing the bankruptcy case, then the preference is likely avoidable.

For businesses this may be paying a large sum to creditor, such as a supplier whom you want to repay in full before filing. For individuals this may be a large payment to a family member.

If this has occurred the case trustee or another party in interest may be able to force the creditor to return the payment to your bankruptcy estate. Then the case trustee will distribute the non-exempt funds to your creditors’ pro-rata.

If you have made a large payment to a creditor prior to filing bankruptcy you should discuss this situation with your attorney.