Today, December 29, 2009, was a cold and miserable day in Atlanta, Georgia.   Unfortunately I had a Chapter 7 bankruptcy 341 hearing to attend at the federal courthouse in Atlanta.  I bundled up the best I could, took the train to the nearest stop – about 1/2 a mile from the courthouse – and braved the cold windy weather.

As my client and I sat and waited for our case to be called, I noted case after case was called and heard by the trustee and that in none of them during my hour stay did any creditor show up.

My client seemed surprised by this – he was expecting to see representatives from several of the more aggressive credit card lenders who had been harassing him.

In fact, creditors rarely appear at Chapter 7 341 hearings – at least that is the case here in the Northern District of Georgia.  Why?  There is little that creditors can do at these hearings.

In the Atlanta district, Chapter 7 341 hearings are scheduled at the rate of 5 to 7 every 30 minutes.  This means that the Chapter 7 trustee will devote all of 5 minutes to any one case.

Creditors who are familiar with the process don’t bother – knowing that there is not time to ask any significant questions, and creditors who are not familiar with the bankruptcy process will find themselves cut off by the trustee after just a few questions.

Occasionally a secured creditor will appear to ask for insurance proof or to ask the debtor if he wants to keep his property – but most of that is now being done prior to hearings by email and mail.

I also sense that creditors recognize the futility of objecting to dischargeability in most cases.  Sure, they can spend several thousand dollars arguing that their debt ought not be discharged but the odds that the debtor will ever pay are slim.

Interestingly a fear that creditors will show up and use the 341 hearing to harass the debtor is pretty much unfounded.  So, if you are facing a Chapter 7 341 hearing, the odds are pretty good that no one will show up to bother you.

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