RULE 2004 AND THE CHAPTER 7 BANKRUPTCY TRUSTEE
It is not unusual for a Chapter 7 Trustee to want to hold a second hearing in a Chapter 7 Bankruptcy Case. This is because the Trustee needs additional information about your situation to decide if an objection should be filed to your obtaining a discharge, if an action should be filed to cause some of your creditors to turn over monies that you may have paid them, if some of your assets should be sold or for many other reasons.
If the Trustee has questions that may be very personal in nature, this hearing may be held so that few, if any other, persons are likely to be present. The 341 hearing was held as part of a hearing where many cases were called and is an open meeting for anyone who happens to be present.
The 2004 hearing is held at a separate time and place and the rest of the world is not invited. Only parties to the case usually come and most of those persons will not show up either. This hearing is usually very low key and the Trustee is asking about specific things. In most of the hearings, the Trustee has already requested a lot of additional paperwork from the debtor and has had it long enough to be able to determine if more paperwork is needed. Oftentimes, the reason for the 2004 meeting is to allow the Trustee and debtor to go over the paperwork that has been provided.
The Trustee receives very little money from a no asset case, approximately $60.00 per case. A Trustee cannot afford to be a Trustee if that is all that is being paid. For that reason, it is not uncommon for the 2004 hearing to be canceled if information is provided in a timely manner to allow the Trustee to determine that this case is a no asset case.
A Chapter 7 Trustee makes the money on the few asset cases that exist. For that reason, you should both never lie and never volunteer any information to the Trustee that you are not asked to provide. Telling the Trustee about your rich sick Mother or Father will, at the least, cause the Trustee to want to investigate if you have received or will receive money from them. A Chapter 7 Trustee is going to be looking for anything that can be turned into an asset that can be sold. The Chapter 7 Trustee takes it personally if you fail to disclose assets that could be sold by the Trustee.
Potential clients often ask, do I have to disclose all of my assets? The answer is really a two part answer.
If what you are not disclosing is really worth going to jail for, losing your right to vote and living if fear that someone will rat you out to the authorities then maybe the answer is yes. Your problem is that someone probably knows about everything you have. Some of the best persons to provide information to a Trustee about failing to disclose are ex-girlfriends, angry ex-business partners, jealous neighbors or the friendly lender to whom you told about all of your assets when trying to get a a loan.
Even if you are not prosecuted as a criminal matter, your case is probably going to be dismissed and you will not get a discharge of any of your debts. You may be barred from ever being able to discharge the debts you were trying to get rid of.
Finally, if you tell me about the asset, I can, in many cases, protect it from being taken by the Trustee anyway.
Would it not be a real shame to be going to jail or not get your discharge because you did not report an asset that a competent bankruptcy attorney could have protected?