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If a Creditor Shows Up at the Meeting of Creditors in Bankruptcy Court, What Questions Can They Ask?

If a Creditor Shows Up at the Meeting of Creditors in Bankruptcy Court, What Questions Can They Ask?Written by Craig D. Robins, Esq.
 
I previously wrote that it is highly unlikely that creditors will show up at the meeting of creditors, which is also known as the section 341 hearing.  See Will Creditors Show Up For My Hearing In Bankruptcy Court? [1].
 
However, in the unusual instance that a creditor does attend, what questions can they ask the debtor?
 
Creditors are entitled to ask the debtor questions about the debtor’s assets and liabilities. However, they are not permitted to cross-examine the debtor as if the trustee was a judge.
 
Sometimes creditors will ask improper questions or become argumentative.  In such instances, any experienced bankruptcy attorney will direct his or her client not to respond to the question, and will also admonish the creditor as to the proper scope of questioning. The trustee will probably do so as well.
 
Also, a creditor cannot use the meeting as a fishing expedition to ask the debtor very general questions. Although a creditor has the right to ask numerous relevant questions, there is not enough time to ask many questions at a meeting of creditors, and trustees will not permit it. 
 
If a creditor wants to ask a lot of questions, they must request an additional examination hearing just for them, which is called a “section 2004 exam” because it is done pursuant to a Bankruptcy Rule 2004.  Section 2004 exams are extremely rare and occur in less than one percent of all consumer cases.
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In the unlikely event there is a section 2004 exam, it would either be held at the Long Island Bankruptcy Court in Central Islip, or more likely, at the attorney’s office of the creditor or trustee requesting it.
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