So I've been meaning to write about my recent 341 experience... here goes:
(warning: long post)
Tip number one: For the love of God, know where you're going! As prepared as I was for the actual 341, I didn't heed the advice offered here on the forum about doing a trial run. I thought looking at the area on a google map would be enough. Wrong. The area was very confusing and it was hard to find a place to park. Very stressful.
Tip number two: allow yourself plenty of time to get to the meeting. Fortunately for me, following this tip helped save my butt when I didn't follow tip number one.
Tip number three: don't under-estimate the trustee. He/She is a finely tuned instrument of financial dissection. I really liked the trustee in my case. She was really smart and nothing seemed to get by her. She varied her questions. It was like she could sniff out a weak spot no matter where it was. In all of it, she was professional and was willing to put people at ease (many of the people didn't want to be at ease - some were even a bit rude... probably nervousness). Like I said, I really liked her. And I'm sure glad I didn't have anything to hide.
The actual meeting:
People trickled into the waiting area looking dazed and confused. The location had recently changed and even lawyers were a bit unsure about where to go. Of course, the signage was horrible and we all spent some time wandering around the building trying to figure out where we were supposed to be. But once we got there, we found an outer-room with tables and chairs for people to talk with their attorneys before going into the hearing room. The hearing room itself was smallish with a couple of desks at the front of the room for the trustee, clerk, and the people being grilled. There were five or six rows of chairs for people waiting to be called. I had the pleasure of sitting next to an older woman who literally prayed (out loud) the whole time she was waiting to be called. We had talked earlier and she was a cool lady. I was hoping that after an hour of praying maybe some of the benefit of those prayers would spill over to the rest of us.
The hearings were running about an hour late. The trustee seemed to get a bit grouchy as the hearings dragged on. At one point she admonished all of the attorneys in the room to get their acts together and make sure their clients were prepared with their paperwork. This seemed odd because 1.) the attorneys who had unprepared clients who caused the logjam were already gone and 2.) it didn't appear that missing paperwork was the problem. One after another, it appeared people were just doing stupid things that caused the trustee to look more closely at their filings and then the fireworks started. More on that in a moment. Some of the people who were there were grilled for more than half an hour. I didn't see any that were under 10 minutes. There were no creditors present for any of the hearings. Everyone I saw was going through chapter 7... no 13s, although one guy probably knocked himself into one.
When we first went into the room, a man was being grilled about his financial statements. His case was complicated. He'd sold a business, kept a second business, gone through a divorce, and had rental properties. He was keeping some of the properties and letting some go. She asked him about each property. He managed to undervalue his vehicle by about $10k, but he was claiming it as a tool of the trade (for his active business and supposedly his only source of income) and it was still within the state's exemptions. The trustee questioned the fact that the man's business had paid him less than $4k ytd. It kind of appeared like the second business wasn't really viable but he was using it to shield assets. Then the trustee blasted the guy's paperwork. He somehow managed to include the costs for all of his rental properties (including those which he'd already stated he did not intend to keep) yet failed to note any of the income on his schedules. Woops. She very kindly told his attorney to revise the paperwork and get it resubmitted asap. Then she indicated the US Trustee would be involved. With the inclusion of the rental income, the guy apparently fails his means test and the likelihood of tripping into a 13 is pretty high. It took forever to get through his items, but it was TV worth watching. It was interesting how she asked him so many questions and got so many responses on tape before letting him know about the US Trustee and the need to revisit the means test.
Following him was a woman who had gotten a $3500 tax refund 4 days before she filed. As of the filing date, she indicated none of it was left. The lady seemed to have no recollection of how she spent $3500 less than 40 days ago, other than paying her lawyer for the bankruptcy, which was already on record as being distinctly less than $3500. Woops. Naturally the trustee was interested in an itemized breakdown of how the refund was spent. And receipts.
Following her was another lady who, when asked how she was making ends meet, noted that her live-in fiancee (of eight years) was paying all of her expenses. That led to questions about the title on the house (it was in her name) and why the fiancee was living there and making payments on it but was not included in the household income calculations. Not only will the trustee now be taking a closer look at the house title, the lady and her lawyer were advised to revisit the means test and schedules I/J. Woops.
And then the next guy who came along failed to note that he had also received a tax refund right before filing. And in a very strange and highly unlikely coincidence, the bank statement that he handed to the trustee just happened to be missing the page that showed the automatic deposit of the refund. I guess he forgot that he'd already provided her a copy of his filed taxes. Woops.
Following him was a guy whose bank statement showed he'd pulled out $400 from his bank account prior to filing his BK. But his paperwork only noted $20 in cash. The trustee wanted to know where that money went. As he stammered out a response, he happened to mention that he'd used some of the money to pay back an unsecured loan to someone he knew. A loan that wasn't listed on his paperwork. Woops.
Then the praying lady went up and her hearing was really straightforward. Except for the fact that she forgot to list a car that she owned as an asset. Apparently it didn't have an engine, so I guess I could see how it might be overlooked. The value of the car was still within the state's exemptions, so she was asked to ammend her paperwork and sent on her way.
Then it was my turn. It went very well. The questions were pretty standard, with some additional attention paid to how I've isolated monies received for SSDI in bank accounts to avoid co-mingling with non-exempt funds. I'm pretty sure that in the span of two hours, mine was the shortest Q&A of all. My attorney was great.
Which brings me to tip number four: Use this forum as a tool. Most of the people I saw today made mistakes that could've easily been avoided if they'd just been smarter about the whole process. None of them appeared to have the support of a group to bounce ideas around. I'm sure their attorneys were good, but mistakes were still made, possibly because people hadn't disclosed some of these things. There is such a wealth of info on this forum that it makes it almost impossible to trip over the easy stuff... it would be crazy to not take advantage of the knowledge & experiences that have been posted.
Thanks to everyone for the info you've shared. It makes a huge difference.
(warning: long post)
Tip number one: For the love of God, know where you're going! As prepared as I was for the actual 341, I didn't heed the advice offered here on the forum about doing a trial run. I thought looking at the area on a google map would be enough. Wrong. The area was very confusing and it was hard to find a place to park. Very stressful.
Tip number two: allow yourself plenty of time to get to the meeting. Fortunately for me, following this tip helped save my butt when I didn't follow tip number one.
Tip number three: don't under-estimate the trustee. He/She is a finely tuned instrument of financial dissection. I really liked the trustee in my case. She was really smart and nothing seemed to get by her. She varied her questions. It was like she could sniff out a weak spot no matter where it was. In all of it, she was professional and was willing to put people at ease (many of the people didn't want to be at ease - some were even a bit rude... probably nervousness). Like I said, I really liked her. And I'm sure glad I didn't have anything to hide.
The actual meeting:
People trickled into the waiting area looking dazed and confused. The location had recently changed and even lawyers were a bit unsure about where to go. Of course, the signage was horrible and we all spent some time wandering around the building trying to figure out where we were supposed to be. But once we got there, we found an outer-room with tables and chairs for people to talk with their attorneys before going into the hearing room. The hearing room itself was smallish with a couple of desks at the front of the room for the trustee, clerk, and the people being grilled. There were five or six rows of chairs for people waiting to be called. I had the pleasure of sitting next to an older woman who literally prayed (out loud) the whole time she was waiting to be called. We had talked earlier and she was a cool lady. I was hoping that after an hour of praying maybe some of the benefit of those prayers would spill over to the rest of us.
The hearings were running about an hour late. The trustee seemed to get a bit grouchy as the hearings dragged on. At one point she admonished all of the attorneys in the room to get their acts together and make sure their clients were prepared with their paperwork. This seemed odd because 1.) the attorneys who had unprepared clients who caused the logjam were already gone and 2.) it didn't appear that missing paperwork was the problem. One after another, it appeared people were just doing stupid things that caused the trustee to look more closely at their filings and then the fireworks started. More on that in a moment. Some of the people who were there were grilled for more than half an hour. I didn't see any that were under 10 minutes. There were no creditors present for any of the hearings. Everyone I saw was going through chapter 7... no 13s, although one guy probably knocked himself into one.
When we first went into the room, a man was being grilled about his financial statements. His case was complicated. He'd sold a business, kept a second business, gone through a divorce, and had rental properties. He was keeping some of the properties and letting some go. She asked him about each property. He managed to undervalue his vehicle by about $10k, but he was claiming it as a tool of the trade (for his active business and supposedly his only source of income) and it was still within the state's exemptions. The trustee questioned the fact that the man's business had paid him less than $4k ytd. It kind of appeared like the second business wasn't really viable but he was using it to shield assets. Then the trustee blasted the guy's paperwork. He somehow managed to include the costs for all of his rental properties (including those which he'd already stated he did not intend to keep) yet failed to note any of the income on his schedules. Woops. She very kindly told his attorney to revise the paperwork and get it resubmitted asap. Then she indicated the US Trustee would be involved. With the inclusion of the rental income, the guy apparently fails his means test and the likelihood of tripping into a 13 is pretty high. It took forever to get through his items, but it was TV worth watching. It was interesting how she asked him so many questions and got so many responses on tape before letting him know about the US Trustee and the need to revisit the means test.
Following him was a woman who had gotten a $3500 tax refund 4 days before she filed. As of the filing date, she indicated none of it was left. The lady seemed to have no recollection of how she spent $3500 less than 40 days ago, other than paying her lawyer for the bankruptcy, which was already on record as being distinctly less than $3500. Woops. Naturally the trustee was interested in an itemized breakdown of how the refund was spent. And receipts.
Following her was another lady who, when asked how she was making ends meet, noted that her live-in fiancee (of eight years) was paying all of her expenses. That led to questions about the title on the house (it was in her name) and why the fiancee was living there and making payments on it but was not included in the household income calculations. Not only will the trustee now be taking a closer look at the house title, the lady and her lawyer were advised to revisit the means test and schedules I/J. Woops.
And then the next guy who came along failed to note that he had also received a tax refund right before filing. And in a very strange and highly unlikely coincidence, the bank statement that he handed to the trustee just happened to be missing the page that showed the automatic deposit of the refund. I guess he forgot that he'd already provided her a copy of his filed taxes. Woops.
Following him was a guy whose bank statement showed he'd pulled out $400 from his bank account prior to filing his BK. But his paperwork only noted $20 in cash. The trustee wanted to know where that money went. As he stammered out a response, he happened to mention that he'd used some of the money to pay back an unsecured loan to someone he knew. A loan that wasn't listed on his paperwork. Woops.
Then the praying lady went up and her hearing was really straightforward. Except for the fact that she forgot to list a car that she owned as an asset. Apparently it didn't have an engine, so I guess I could see how it might be overlooked. The value of the car was still within the state's exemptions, so she was asked to ammend her paperwork and sent on her way.
Then it was my turn. It went very well. The questions were pretty standard, with some additional attention paid to how I've isolated monies received for SSDI in bank accounts to avoid co-mingling with non-exempt funds. I'm pretty sure that in the span of two hours, mine was the shortest Q&A of all. My attorney was great.
Which brings me to tip number four: Use this forum as a tool. Most of the people I saw today made mistakes that could've easily been avoided if they'd just been smarter about the whole process. None of them appeared to have the support of a group to bounce ideas around. I'm sure their attorneys were good, but mistakes were still made, possibly because people hadn't disclosed some of these things. There is such a wealth of info on this forum that it makes it almost impossible to trip over the easy stuff... it would be crazy to not take advantage of the knowledge & experiences that have been posted.
Thanks to everyone for the info you've shared. It makes a huge difference.
Waiting for February 14 2011, date objections due. 
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