No business owner wants to find out that a client or anyone else who owes them money has filed for bankruptcy. However, if you know a bit about how bankruptcy law works, you may be able to improve your chances of recouping at least a portion of what you are owed.
It’s important to know about creditor meetings. These are commonly called 341 meetings because that’s the section of the Bankruptcy Code in which they’re addressed.
A 341 meeting is required for those filing for Chapters 7, 11, 12 and 13 bankruptcy. They’re typically held somewhere between three and eight weeks after the bankruptcy filing. Anyone who is listed as a creditor in the bankruptcy filing should receive notification of the meeting.
The person or company filing for bankruptcy is required to attend the meeting, and the bankruptcy trustee generally oversees it. Creditors are not required to attend, and they don’t lose their rights as a creditor if they don’t attend. The order of repayment typically remains the same. It’s based on things like whether the debt is secured or unsecured.
What happens at these meetings?
These meetings are often held via videoconference and typically don’t last long. By attending the meeting (especially if you’re prepared with questions and know what to listen for), you can improve your chances of getting some repayment.
The 341 meeting gives the creditors in attendance, as well as the bankruptcy trustee, the chance to ask the debtor questions related to their assets and debts that they have sworn to answer truthfully.
If you learn of a debtor’s bankruptcy and aren’t notified of the 341 meeting, or you have questions about any ways you can improve your chances of collection, it can be worthwhile to get experienced legal guidance. This can help you make your best efforts to collect what is owed you.