Most bankruptcy filers have not heard of the 2004 procedure, and that is a good thing. To know about it probably means that you have messed your bankruptcy case up pretty badly. To help prevent you from ever finding out about this issue in person, read on to learn more about what prompts the 2004 Exam and how you can easily avoid it.
Don't Break the Rules
Just like in any other legal proceeding, there are rules. Bankruptcy has some history of being the default for those who want to take advantage of its ability to forgive debt. Past abuse by consumers only means that now, filers are far more likely than ever before to run afoul of the bankruptcy codes. Most bankruptcy issues revolve around what you do before you even appear in the bankruptcy attorney's office. If you know about it ahead of time, you can avoid filing bankruptcy until things are cleared up.
What is Rule 2004 of the Bankruptcy Code?
This hearing means that the bankruptcy trustee or a creditor needs to question you about some aspect of your case. The creditor's meeting opens the door for creditors to appear and question you about your case, but just because they don't do so doesn't mean they cannot do so afterward. When you are called to appear at a Rule 2004 meeting, it means you have some more explaining to do.
Issues That Can Prompt the 2004 Examination
To avoid problems, review the following common bankruptcy issues with your bankruptcy attorney:
Hiding Assets – If the bankruptcy trustee has reason to believe that you have not been honest when you listed your property on the bankruptcy forms, you may be questioned under oath. Some trustees – or their representatives – visit a filer's home and other property locations to ascertain the validity of the assertions on the paperwork. Just be accurate when you fill out your property holdings inventory and you have nothing to worry about.
Pre-bankruptcy Transactions – The trustee can, and will, look back over the months prior to a filing in search of sales and gifts to others. Selling, trading, or giving away property can be seen as disposing of property that could be sold and provided to your creditors. For example, if you let your cousin "buy" your jet-ski and you failed to charge them fair market value, the sale could be undone.
While the above are common reasons for a 2004 exam, they are not the complete list of issues. Speak to a chapter 7 or chapter 13 bankruptcy lawyer to find out more about being honest and accurate with your filing.