While your bankruptcy case is pending, any person or entity with an interest in your bankruptcy can request an opportunity to investigate matters related to your bankruptcy. This is called a 2004 Examination. This article explains what a 2004 Exam is, who can use it and how it is used.
(Learn more about the procedures when you file for bankruptcy.)
Rule 2004 of the Federal Rules of Bankruptcy Procedure allows any “interested person” to require someone else to testify and produce documents on matters related to your bankruptcy. The 2004 Exam can cover a broad range of issues, including:
your actions, conduct or property
your debts and financial condition
any issue that relates to your bankruptcy assets or Chapter 13 plan, and
The 2004 Exam is not like a 341 meeting of creditors. It is more formal and involves a more detailed investigation of issues related to your bankruptcy. It is similar to a deposition, sometimes requiring the production of documents. However, unlike a deposition, the witness who is the subject of a 2004 Exam is not always entitled to attorney representation or cross-examination, and the right to object to questions is limited.
“Any party in interest” can request a 2004 Exam. That can include:
your bankrutpcy trustee
Most commonly, the trustee or a creditor requests the 2004 Exam.
A 2004 Exam is used a variety of ways. The scope of a 2004 Exam is quite broad, and for that reason is sometimes referred to as a “fishing expedition.” How the 2004 Exam is used will often depend on the person requesting it.
Most often, a trustee will request the 2004 Exam to investigate:
the location of your assets
your financial transactions
the accuracy of your bankruptcy schedules and other papers, and
Creditors may also request a 2004 Exam to:
find property that is not part of the bankruptcy estate, or
You may find a 2004 Exam to be beneficial, too. For example, you can use it to explore the basis of a creditor's potential nondischargeability claim.
A 2004 Exam is not automatic. The person has to request it by filing a motion with the bankruptcy court, and must have “just cause” (meaning, a good reason related to that person's claim) for requesting it. A creditor cannot use a 2004 Exam simply to harass or abuse you. If the court grants the motion, it will then issue an order, directing you or another witness to appear for questioning at a certain date and time.
A 2004 Exam is limited to the main bankruptcy proceeding only. If an adversary proceeding, such as a nondischargeablity complaint, has been filed, then a 2004 Exam can no longer be used to get information by the people involved in that proceeding. Instead, the parties must resort to the normal federal discovery rules.