09 Aug 2017

Your Travel Guide to 341(a) Meeting Preparation

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Buckle up! The BMS University train is on its way and we’re trekking through 341(a) Meeting preparation. On this short trip, you’ll learn what to focus on while preparing for your meetings, and also what to look for while reviewing the petition including schedules, SOFA, and more.

And away we go!

What to Look For While Preparing

Our first stop is what to focus on while preparing for your 341(a) meetings. What should you be looking for overall? Here are a few landmarks to keep an eye out for:

  • Assets: You will want to know if the case could produce any potential funds to disburse to creditors, so keep an eye out for any potential assets.
  • Fraud: The UST expects Trustees to be the first line of defense when it comes to bankruptcy fraud, so watch out for any telltale signs of fraud. If anything looks off, make a note of it.
  • Questions: Sometimes what is found on the schedules can lead to more questions which could end up uncovering additional or hidden assets. Make note of any areas where additional questions could be asked.

Now that you know what to look for overall, our next stop is what to look for while reviewing debtor forms. All aboard!

Reviewing the Petition

Now we’ll delve into the petition and what to look out for while reviewing this document. There are four main parts to the petition: Schedules A-J, the Statement of Financial Affairs (SOFA), the Statement of Intention, and the Means Test. It is important to make notes about your findings in the petition so you can ask questions of the debtor or request additional documentation as needed. Learn what to look for in each section below!

Schedules A-J

Schedules A/B

All assets beginning with real property. These include household goods, cars, electronics, and more:

  • The real property is listed first. Compare the value that is listed on Schedules A/B to the value listed on Schedule D for mortgage(s) on the property. Then, factor in whatever exemptions the debtor takes on Schedule C. If there is value remaining, this is a potential asset. You may want to check the Zillow value (integrated into CaseLink² and CaseLink Office) to get an outside perspective on the value – don’t just take the debtor’s word for it. If there is a large discrepancy, you may want to send an agent or auctioneer to check out the property.
  • Cars are listed next. Compare the values listed on Schedules A/B to Schedules C/D. You might also want to compare the value to what is listed on Kelly Blue Book or the NADA Used Car Guide.
  • Few of the remaining assets on Schedules A/B will have secured debt. Check the exemptions on these in Schedule C and note any potential assets or decide whether more information is needed.

Schedule C

The exemptions the debtor is taking for properties listed on A/B. You may need to verify if these exemptions are in compliance with your state’s exemption codes if they look too high.

Schedule D

Secured debt on properties listed in Schedule A/B. These values will add up to determine how much value a particular asset may have for the estate.

Schedules E/F

Priority and general unsecured claims. It’s good to be aware of the information in these schedules, but they are usually not a big concern at the 341(a) meeting. However, the total amount of these claims can be important in determining whether a small asset case could yield a meaningful distribution to unsecured creditors, so pay attention to the dollar figures listed here.

Schedule G

Executory Contracts and Unexpired Leases. This is typically not information that could lead to finding assets, but there may still be some potential – so review this section accordingly.

Schedule H

Any Co-Debtors on the petition. This information is important to determine ownership of property and/or debt.

Schedules I/J

Debtor and spouse’s income and expenses. Items you may want to look for in these schedules are:

  • Deductions from payroll. Is there a DSO included?
  • Other income – Rental income. Did they list the second home?
  • Other income – Interest and dividends. Did they list the stock/bond/other investment?
  • Real estate taxes on Schedule J. Did they list any real property owned?
  • Utilities, food, clothing and other expenses. Glance over these items to make sure they fit the National standards listed here.
  • Car payments. Did they list the vehicles?

Statement of Financial Affairs (SOFA)

Listed below are the main sections you will want to look at and questions to ask yourself as you review the SOFA form.



Did both spouses list income in question 4 or 5?

Line 6

This line may include preferences, which may lead to a potential recovery to disburse equally to all creditors—such as if the debtor paid over $600 to any one creditor.

Lines 7 & 8

These lines are similar—they both include payments to anyone considered an insider.

Line 9

This line includes lawsuits, possibly those filed against the debtor or a lawsuit they filed. If the debtor is the plaintiff in a lawsuit, it could mean recovery for the estate.

Line 10

This line helps you understand if the debtor is in a pattern of foreclosures or repossessions.

Line 13

This line includes gifts given which could also be recovered.


Line 15

This line sometimes includes items listed as Losses which actually could lead to a potential recovery (i.e. an insurance claim.)

Line 16

This line lists transfers, such as paying the debtor attorney. This line could potentially include assets which could be recovered in an adversary case, such as if the debtor gave a car for $1 to their mother, or sold a house for significantly less than its appropriate value.

Line 27

This line lists businesses owned. This line may have information that could lead to the sale of inventory or takeover of the business. It is good to ask questions about this line to the debtor at the 341(a) meeting.

Statement of Intention

Form 108 in the petition is the Statement of Intention. This form is important to review because, if the debtor intends to surrender the property, there’s a good chance they have decided they couldn’t get more than what is owed in a sale. This information could be a good indicator of the asset’s potential, so take close note of this form.

In addition, if the property they wish to surrender is underwater, you may to short sell the property and return some money to unsecured creditors. Consider keeping the case open until you’ve investigated your short sale options such as the RealAssist program by BMS with a guaranteed carve-out for the estate on eligible properties.

Means Test

Form 122A in the petition is the Means Test. If the debtor has failed the first part of this means test, they have to complete another section to determine their eligibility — which may end up requiring them to pay some debt back in a Chapter 13 case.

It is important to be familiar with what your UST requires if you find the case is presumed to be an abuse of the Bankruptcy Code. You may need to collect additional documentation from the debtor which proves they pay certain costs over and above the national standards for food, clothing, education and more.