Cite as: Keith M. Lundin, Lundin On Chapter 13, § 115.4, at ¶ ____, LundinOnChapter13.com (last visited __________).
Because Chapter 13 cases move quickly and because the stakes in individual cases are typically small, conducting discovery and preparing for a hearing on confirmation has to be focused and efficient.1 In a jurisdiction that confirms plans at or near the § 341 meeting,2 a creditor with an objection may have fewer than 50 days to prepare for the hearing on confirmation. The normal time periods for conducting discovery in a contested matter are too long.3 Creditor’s counsel must either move to reset the hearing on confirmation to permit discovery or move to reduce the time for responding to discovery requests. Examinations pursuant to Bankruptcy Rule 2004 are often used to prepare for a hearing on confirmation;4 however, there is authority that once an objection to confirmation is filed, the contested matter provisions of Bankruptcy Rule 9014 require discovery in the forms allowed in an adversary proceeding and preclude the use of a Rule 2004 examination.5
Financial information about the debtor is almost always important at a hearing on confirmation. The good news is that consumer Chapter 13 debtors rarely have complicated financial pictures. Typically there are paycheck stubs, maybe a tax return, maybe a checking account and occasionally a small box of receipts, coupon books and other documents.
There is disappointment if not embarrassment in store for the creditor’s counsel who expects to prove lack of good faith through a first-time examination of the debtor at the hearing on confirmation. A serious good-faith objection to confirmation requires discovery of the debtor in advance of the hearing on confirmation and impeachment of the debtor with other evidence at the hearing.
At confirmation hearings, counsel often rely on portions of the court’s file—for example, the schedules to Official Bankruptcy Form 6 filed by the debtor. Preparation for a confirmation hearing includes assembling copies of the important documents in a form that is admissible as evidence.
1 See § 66.4 [ Preconfirmation Discovery Rights of Creditors ] § 56.5 Preconfirmation Discovery Rights of Creditors.
2 See § 216.1 [ Timing of Hearing on Confirmation ] § 115.1 Timing of Hearing on Confirmation before BAPCPA.
3 Unless modified by local rules, the 1993 amendments to the discovery provisions of the Federal Rules of Civil Procedure are applicable in contested matters by incorporation into Bankruptcy Rules 7026 and 7028–7037. See Fed. R. Bankr. P. 9014. The required disclosures under Rule 7026(a) and the meeting of parties under Rule 7026(f) may be wonderful ideas, but the time periods for compliance are unrealistic in districts that reach confirmation in 50 or fewer days after filing.
4 See also § 66.4 [ Preconfirmation Discovery Rights of Creditors ] § 56.5 Preconfirmation Discovery Rights of Creditors.
5 See, e.g., Kahn v. Dastejerdi (In re Dastejerdi), Nos. 01-11725-SSM, 01-1134, 2001 WL 1168178, at *6 (Bankr. E.D. Va. Sept. 21, 2001) (Rule 2004 examination is not proper method of discovery by creditor with pending objection to confirmation. “[T]he court notes that a motion for a Rule 2004 examination is procedurally improper as a means of obtaining evidence for use in an adversary proceeding or contested matter. . . . [D]iscovery in an adversary proceeding does not require court approval and is obtained by means of depositions, interrogatories, requests for production of documents, and requests for admissions. . . . Discovery in contested matters is obtained in the same way . . . . [T]he court will simply deny the motion for Rule 2004 examination without prejudice to the plaintiff’s right to take discovery under Rules 7028 to 7034.”).