Bankruptcy Discovery: 341 Hearing Vs 2004 Exam



During the course of your bankruptcy case, a lot of time and effort will be spent in the discovery phase to ensure that all pertinent details are out in the open for examination.

One way the bankruptcy trustee can gather information during the fact-finding portion of your case is at the 341 hearing, which is also known as the Meeting of the Creditors. The 341 hearing is often relatively short and although any of your creditors are invited to attend, they usually do not. You, however, are required to attend the 341 hearing.

At the 341 hearing, you’ll be asked to show some financial documents, including: your mortgage statement or lease agreement, banking statements, most recent pay stubs, deeds to any property you own, your most recent tax returns (or any specific returns as requested) and proper photo ID.

Your bankruptcy trustee is in charge of organizing and running the Meeting of the Creditors. The trustee will ask you a variety of basic questions pertaining to your bankruptcy case, ranging from your reason for filing to whether or not you have filed for bankruptcy in good faith. Any creditors who may attend may ask you questions about your intentions; for example – your vehicle loan company may ask whether you plan to reaffirm your auto loan after your bankruptcy case. In general, the Meeting of the Creditors is not a cause for anxiety.

While a 341 hearing is a common proceeding in any bankruptcy case, if the trustee or any of your creditors feel that there are problems with some of your answers or that you are withholding information, a 2004 Examination may be warranted. Lesser-known than the Meeting of the Creditors, the 2004 Exam takes a deeper look at your finances if questions cannot be answered sufficiently at the 341 hearing.

Derived from Rule 2004 of the Federal Rules of Bankruptcy Procedure, the 2004 Examination comes into play when more information is needed in order to proceed with your case. Unlike the 341 hearing, a 2004 exam is more like a deposition, and you will be questioned more intensely.

Typically, a 2004 Exam is requested by either the bankruptcy trustee or one of your creditors when something in your bankruptcy documents and/or financial paperwork raises a red flag. They may have reason to believe that you or a family member:

  • Continued to run up debts immediately prior to filing for bankruptcy
  • Gave preferential payments to one or more of your creditors
  • Have suspicious bank transactions
  • Made a transfer of property out of your name immediately prior to your bankruptcy filing date

Sometimes, the trustee simply needs more information. Many times, financial documents are incomplete, complicated or may need clarification. You may very well still be able to move forward with your bankruptcy even if a 2004 Exam is requested.

You should, however, be prepared for a rather extensive questioning session at the 2004 Exam. Make sure that your answers are as forthcoming as possible so that your bankruptcy will proceed toward discharge or reorganization, allowing you to get the fresh start you need. Your bankruptcy attorney will help you understand what will likely be asked at the 2004 Exam, and he will attend the Examination with you.


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