MasConcepts Incorporated

Hi all, had my Chapter 7 341 meeting today and I’m curious if anyone has been through something similar and can tell me what happened next…

My wife and I own a small service business that we’ve operated since 2016. We filed Chapter 7 after several years of declining profitability and increasing debt. We were fully expecting the trustee to ask questions like:

“Why are you filing bankruptcy?”

“What caused the business to fail?”

“What changed financially?”

Instead, almost none of that came up….

The trustee spent most of the meeting asking about specific bank transfers between our business accounts, memo descriptions on transactions, and a few payments that were made from business accounts.

For example, he focused heavily on:

• A $15,000 transaction that was later reversed after an online banking mistake.
• A $20,000 transfer between accounts (which was made up of in part the same $15k but he treated it like it was a separate dollar amount, because that’s how it looks on a statement with no context…)
• Memo descriptions such as “shareholder loan repayment” and “temporary business cash loan.”
• Mortgage payments that were made from business accounts.

The thing is, none of these transactions involved cash withdrawals or hidden accounts. Everything was between accounts at the same bank, and every transaction has an explanation and supporting documentation.

The trustee kept saying he wanted to understand where the money ultimately went and said he would need to review additional documents.

He also asked about a property that belongs to my elderly mother because my name was added to the deed many years ago for survivorship purposes. She has a reverse mortgage on the property and lives there.

What surprised me was that we sat through nearly an hour of other 341 meetings before ours, and most people were finished in a few minutes. Ours went significantly longer because of the business records and account activity.

My attorney had warned me beforehand that the trustee would probably focus on the banking activity and account transfers, but I still wasn’t expecting that to become the entire focus of the meeting.

For those of you who are self-employed or have gone through a business-related Chapter 7:

• Did your trustee ask for additional documents after the 341?
• Did they continue investigating transfers between accounts?
• How long did it take to resolve?
• Did it ultimately turn into a non-event once the documentation was provided?

At the end of the meeting the trustee’s attorney basically said they wanted to review additional documents before asking any further questions.

Just trying to get a feel for what usually happens next in situations like this…. thanks all and keep your heads up!