Corporate creditors and credit unions, normally direct their own attorney to appear in certain cases at the “first meeting of creditors” when a debtor files for bankruptcy.

The bankruptcy court has held that a corporate creditor may have a regular employee, who is not an attorney, appear on its behalf at the first meeting of creditors and question the debtor.

The court found that questioning a debtor at this examination is not considered to be an act of practicing law and an employee should be permitted to appear for the creditor. In re Garry Kincaid, 146 B.R. 387.

EDITOR’S COMMENT

Some credit unions request their attorney to appear at all of the first meeting of creditor hearings; other credit unions only request the attorney’s appearance for those cases when information may be obtained that could benefit the credit union or result in a reaffirmation of the debt to the credit union.

In either event, if the credit union personnel is knowledgeable of the questions to present, the credit union may be able to decrease its expenses by having its own personnel appear at these hearings. This comment should not be interpreted to suggest that the attorney’s appearance would not be beneficial to the credit union in some cases, however, most of the questioning at the first meeting of creditors is limited in time; if additional time is required, the credit union attorney would schedule a Rule 2004 exam with unlimited time to question the debtor and determine the credit union’s rights.

Author: Charles R. Harroun, Attorney at Law