Most bankruptcy cases proceed without a hitch. But on occasion, an issue can arise regarding a debtor’s property or a creditor’s right to receive payment. In such cases, anyone with an interest in the bankruptcy case can find out—or “discover”—information that could help resolve the issue by setting a 2004 examination (essentially a deposition). In this article, you’ll learn more about a 2004 examination, including who can request it and how it works.
Occasionally, the bankruptcy trustee, a creditor, or the debtor in a bankruptcy case will want to ask the debtor or another witness questions under oath. Or, a party might need documents that might be relevant to the issues in the bankruptcy case. A 2004 examination (authorized under Rule 2004 of the Federal Rules of Bankruptcy Procedure) works like a deposition. The witness is placed under oath and answers questions. A court reporter records and transcribes everything said. The witness might also be required to produce documents.
Almost all debtors who file for bankruptcy relief must attend a hearing called the meeting of creditors (also called the 341 hearing). At the meeting of creditors, the trustee and any creditors who attend can ask the debtor questions under oath about matters that relate to the bankruptcy.
But the trustee typically conducts several 341 hearings per hour, so there isn’t a lot of time for creditors to ask questions or for the trustee to investigate matters in detail. At times, the trustee will continue the 341 meeting to another day if a creditor needs additional time to question a debtor. But, if an extra hour or so isn’t sufficient, a 2004 examination will be set to allow the investigation of the debtor’s financial affairs in more detail.
Most bankruptcy debtors won’t have to attend a 2004 examination. They’re rarely scheduled, and when they are, it will often be in a complicated case or one involving fraud allegations. Other reasons the trustee or your creditors might schedule a 2004 examination include:
Learn about red flags the trustee looks for in a bankruptcy case.
All parties in interest (those with a stake in the bankruptcy) have a right to request a 2004 examination. In most cases, a 2004 examination will be requested by the trustee, a creditor, or the debtor.
The requesting party must file a motion with the court and explain the reasons why it needs to conduct a 2004 examination. If the court grants the motion, it will issue an order authorizing the examination. A debtor who will be examined must appear at the time and place designated on the order for the examination. But if the witness is not the debtor, the examining party must issue a subpoena to compel attendance.
A 2004 examination can be used to examine the debtor or any other non-debtor witness who has knowledge that’s relevant to the issues in the bankruptcy. In general, the 2004 examination may cover any of the following:
Learn about objections to bankruptcy discharges.
While the 2004 examination can be used to investigate a wide variety of issues, the examining party typically can’t:
Learn about adversary proceedings in bankruptcy.