Proof of Claims
Motion for Relief From Stay
Objection to Confirmation
Motion to Dismiss
Objecting to Discharge
A Rule 2004 examination of a debtor or any party involved in a bankruptcy case is a very powerful tool for creditors and the trustee assigned to the bankruptcy case to obtain information and documents regarding the income, expenses, assets and history of a debtor or other party leading up to and after a bankruptcy case is filed. These types of examinations have been compared to the likes of a fishing expedition. A trustee in case will initially question the debtor at the Section 341 meeting of the creditors, but this is a limited forum and a more extensive questioning of the debtor might be necessary. If there are numerous discrepancies in the bankruptcy petition or facts come to light that require the production of documents the debtor may not willingly turnover a trustee will request a Rule 2004 examination of the debtor or other party in interest. The Office of the United States Trustee may also make the same request for similar reasons.
Bankruptcy 2004 examinations are named after the section of the bankruptcy procedure that allows the examination. Federal Rule of Bankruptcy Procedure 2004 provides on motion of any party in interest, the court may order the examination of any entity. The scope of the examination may relate only to the acts, conduct, or property or to the liabilities and financial condition of the debtor, or to any matter which may affect the administration of the debtor’s estate, or to the debtor’s right to a discharge. This is a very broad standard and case law more or less provides information that may lead to admissible evidence in the bankruptcy case can be requested. The extent of the inquiry under Rule 2004 is intended to be very broad and permits the party invoking it great latitude of inquiry. See In re Valley Forge Plaza Assoc., 109 B.R. 669, 674 (Bankr. E.D. Pa. 1990). Furthermore, examinations under Rule 2004 are allowed for the purpose of discovering assets and unearthing funds.” See 8 Collier on Bankruptcy, 2004.4, 2004-10 (15th ed. 1993).
There are however limits to this type of examination. They cannot be used to harass or abuse the bankruptcy filer or the party the examination is for. Also, if an adversary proceeding was already filed then the discovery process pursuant to the Federal Rules of Bankruptcy Procedure 7026 should govern. The court will most likely not enter an order for a Rule 2004 examination once an adversary proceeding is filed regarding the same subject matter.
Many Rule 2004 examinations are requested prior to a creditor or trustee filing an adversary proceeding to obtain more facts and information to substantiate or confirm grounds to objection to the debtor’s discharge or dischargeability of a debt of the debtor. If you received a notice of bankruptcy filing in the mail and believe the debt owed to you should not be discharge in the bankruptcy case the first step in finding out more information could be requesting a Rule 2004 examination of the debtor or another party. Please give us a call at 1-877-963-9543 for more information. In the Bankruptcy Court for the Northern District of California Rule 2004 examinations can be requested on an ex parte basis. Pursuant Local Rule of Bankruptcy Procedure 2004-1 the Clerk of the Court may issue an order on behalf of the Court, on an ex parte basis and without notice pursuant to Bankruptcy Rule 2004.
