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Do you find it difficult to fund your basic living expenses after making payments on your mortgage, credit cards, medical bills, car loan, and other debts? If so, you may be considering filing for bankruptcy. If you do, you’ll sit down with your bankruptcy lawyer, creditors, and the appointed trustee for a 341 meeting, or creditors’ meeting, named for the Bankruptcy Code section that regulates it.

The 341 meeting occurs about 30 days after filing your bankruptcy petition and usually takes about 15 to 30 minutes to complete. Here are the topics you’ll be asked about while under oath during this meeting.

Whether You’re Sure Bankruptcy is Right for You

Bankruptcy isn’t the “easy way out.” You should only consider it as a last resort. Before filing, consider some of these options to help you get your finances back under control:

  • Pay off high-interest debt first.
  • Look into income-based repayment plans.
  • Request graduated payment plans, which begin with a low monthly amount due that progressively increases over time.
  • Extend your repayment period to reduce the amount you owe each month.

Nondischargeable Debts

The 341 meeting covers what debts cannot be discharged, or forgiven, when you file for bankruptcy. Some of these include:

  • Unpaid taxes and court fines
  • Student loans
  • Child support and alimony
  • Recently purchased luxury items

Exempt and Nonexempt Assets

If you file for Chapter 7 bankruptcy, you’re asking the court to forgive your debts in exchange for some of your belongings. Many of your assets—including bank accounts, stocks and bonds, second cars or homes, collectibles, and family heirlooms—are nonexempt. This means you are expected to forfeit these items so the court can sell them and help pay off your debt.

On the other hand, you are entitled to keep exempt property throughout the bankruptcy process. These assets may include a car (up to a certain value), a portion of your home equity, necessary clothing and household items, jewelry (up to a certain value), pension plans, unpaid but earned wages, and public assistance, including social security and unemployment benefits.

The 341 meeting establishes your exempt and nonexempt assets. If you attempt to transfer property out of your name or otherwise hide it from your creditors or trustee, you are committing bankruptcy fraud, which could lead to criminal prosecution. Remain honest throughout the bankruptcy process to help you come out of it as unscathed as possible.

Reaffirmation of Debt

Listing debts for reaffirmation lets you keep certain exempt assets. However, doing so requires you to continue paying them off. Reaffirmed property remains separate from your bankruptcy and is ineligible for discharge.

If you still have questions regarding the 341 meeting and how to prepare for it, Cutler & Associates can assist you. Let us serve as your bankruptcy lawyer during this meeting and help you make the best choices for your situation during the bankruptcy process. To learn more, schedule a free consultation with Cutler & Associates in Chicago today.