If you file Chapter 7, you usually go to court for a 5-minute “341 Hearing”. No, your hearing is not in Room 341. Instead, “341” is the code section that requires you to appear at a hearing where creditors and the Trustee ask questions. It usually is in the federal courthouse, but if there is no federal courthouse in a rural area, it may use a local state courthouse. In Lexington, it is in a bank building.
If your petition is clear, accurate, and supported by documentation, the hearing will be short and only last 5 minutes. A Chapter 7 trustee conducts the hearing to ensure your petition is accurate. Also, you must bring your social security card and a government photo ID, such as a driver’s license or passport, to the hearing. If you don’t appear with these identifications, the trustee will reschedule the hearing, or the case will be dismissed.
The required supporting documents must be received within 14 days of the hearing. This is an important deadline because the Trustee can dismiss the case if they do not receive them within 14 days of the hearing. The hearing is conducted by Zoom and here is a page with the instructions for logging in with your phone, tablet, Mac or computer.
The Questions the Trustees Ask at Chapter 7 • 341 Hearings
The routine questions they ask you at a 341 hearing may include:
- Did you review and prepare the petition with your attorney?
- Do you need to make any changes to your assets, income, debts, or expenses?
- What is your name?
- What is your address?
- Did you transfer or give away any money or property within the last year?
- Do you intend to reaffirm or redeem your car loan?
- Have you recently won the lottery or inherited property?
- What caused your bankruptcy?
- Do you understand what chapter 13 is, and did you consider it?
- Do you understand what a discharge is?
- When did you know you were bankrupt?
- Do you operate any businesses?
Louisville, Kentucky bankruptcy trustees and the 341 hearing.
The Chapter 7 trustee is paid a small amount to review your petition, about 70 dollars in 2024. He has to do his job and prove he properly reviewed your petition for accuracy.
The Chapter 7 trustee can’t do that unless the petition is accurate and supported by documentation of your income, assets, expenses, and debts. If you make his job difficult, he will not approve your petition until you satisfy him. Unfortunately, this puts you through time, multiple hearings, and additional expenses.
The Chapter 7 trustee also makes a minor commission on a sliding scale for selling any property that is not exempt. However, this is very rare. Regardless, you are required to explain and disclose all of your assets to your attorney so he can exempt them and you can keep the property. Remember any property you own that is not listed can be seized. The federal exemptions used in Kentucky and half the states are substantial, so you usually keep all your property.
You should also tell your attorney if you have any judicial liens to be stripped. Judicial liens are placed on a home when a creditor files a lawsuit and wins a judgment. If the case has to be reopened later to strip a lien, it is far more expensive than if you do it on time. The cost to reopen the case to fix a mistake is about 600 dollars. Every year someone forgets to do the second class or add a debt until it is too late and the case closes.
If you are facing bankruptcy, don’t delay. Contact my office right away to start the conversation. Nick C. Thompson, Foreclosure Lawyer: 502-625-0905