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Copyright (c) 1994 Emory University School of Law
Emory Bankruptcy Developments Journal

CLAIMS & OPINIONS: RULE 2004: A USEFUL RULE OR AN ABUSIVE CREDITOR'S WEAPON?

1994

10 Bank. Dev. J. 451

Author

by Judge Randolph Baxter * and Jamie B. Schneier **

Excerpt



I. INTRODUCTION


Rule 2004 was developed to facilitate discovery of the debtor's assets: specifically, their extent and location. 1 The scope of such an examination, however, is only limited to information which would affect the administration of the bankruptcy estate. 2 Without checks upon the examination, debtors in bankruptcy may find themselves in a hostile or coercive environment with a creditor's attorney pressuring for a debt reaffirmation or some other relief. Moreover, Rule 2004 examinations apply to all chapters of the Code 3 but are most often employed in chapter 7 where there is
the greatest potential for abuse. This article explores the potential abuse of debtor's examinations, in addition to suggesting some alternatives and safeguards for this process.

Upon the filing of a chapter 7 bankruptcy, several things happen. An automatic stay is imposed, which precludes creditors from taking actions against the debtor or the debtor's property. 4 An interim trustee is then appointed to administer the estate. 5 Then, usually within thirty days, a creditors' meeting occurs. 6 At the creditors' meeting, the trustee and the creditors question the debtor to determine the debtor's intentions and the extent of the debtor's assets. 7 At that meeting, the creditors may also elect a permanent trustee. 8

The goals of a chapter 7 bankruptcy are to collect and preserve assets for the creditors while, at the same time, giving the honest debtor protection and a fresh start. 9 To accomplish these goals, a trustee must gather the assets belonging ...
 
 
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