Once a bankruptcy case is filed, any interested party can file a motion with the court for an order permitting the examination of the debtor or other people with knowledge, under oath. The examination usually occurs in a law office and is similar to a deposition (see http://www.middlesexcountypersonalinjuryattorney.com/2014/01/), and is authorized by Rule 2004 of the Federal Rules of Bankruptcy Procedure.
A court reporter is present to take down all of the questions and answers, which are prepared in the form of a booklet that may be used in future court proceedings. Typically, the debtor’s attorney would be present as well. The debtor may also seek to conduct a 2004 examination of some relevant party. These examinations cannot be used to harass anyone.
The purpose of the 2004 exam is to ask questions in more detail than can occur at the 341 hearing (see http://www.middlesexcountybankruptcyattorney.com/2013/02/) and to compel production of documents which may have a bearing on the case. A creditor or the bankruptcy trustee is the most common person to request and conduct this examination. The scope of the questioning is generally limited to the “acts, conduct or property or to the liabilities and financial condition of the debtor” or “any matter which may affect the administration of the debtor’s estate” or “to the debtor’s right to a discharge”. That is a fairly broad scope.
For example, if the trustee believes based upon a review of the debtor’s bank statements on or before the 341 meeting of creditors that the debtor is concealing income, then a 2004 examination may be warranted. Another instance is where a creditor believes that the debtor may not be entitled to a discharge of the creditor’s debt, but wishes to gather more information before deciding whether to file an adversary proceeding to except that debt from discharge.
A 2004 examination can also be used in a Chapter 13 case to investigate the debtor’s business, the source of money or property proposed by the debtor to be used in his/her Chapter 13 plan, and the consideration for that money or property.
It should be noted that once an adversary proceeding is filed (e.g. for the court to determine the nondischargeability of a debt), a 2004 examination can no longer be used, but rather the interested party would need to serve a deposition notice on the person to be examined, for which a court order is not needed.
An experienced bankruptcy attorney can explain to you what to do if you are ever subject to a 2004 examination.