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What is the scope of discovery during a bankruptcy case?

On Behalf of | Jan 4, 2022 | Bankruptcy |

In bankruptcy, as in all legal proceedings, there is a process called “discovery,” whereby evidence is presented and examined. Bankruptcy Rule 2004 usually governs what can be examined in a Michigan bankruptcy case. According to Bankruptcy Rule 2004, examinations in bankruptcy must relate to one or more of the following:

  • Acts or conduct of the debtor 
  • Property, liabilities and financial condition of the debtor 
  • Matters related to the debtor’s estate administration 
  • Matters related to the debtor’s right to a discharge 

This scope is clearly far-reaching, which can be concerning to debtors. However, an experienced lawyer will understand that, even within this wide scope, there are some limitations. For example, the pending proceeding rule in particular can help to limit this scope. If a separate matter is first brought that is not pursuant to Bankruptcy Rule 2004, the discovery rules applicable to that proceeding will be used.  

The case law on the pending proceeding rule in bankruptcy ranges from very straightforward applications to less clear-cut instances, but it may be something a lawyer raises in a bankruptcy case. While the pending proceeding rule may not play a role in all Michigan bankruptcy cases, it is one of many considerations a lawyer will make when approaching the discovery part of a case. Each case should be considered uniquely, and approaches should be tailored to the debtor’s unique situation. The complexity of the discovery process and various options therein shows how critical it is to have an experienced attorney when going to bankruptcy court. 

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