Monday, January 16, 2012

When you are preparing to file bankruptcy HONESTY is the best policy.

If you meet with an attorney to discuss your debt relief options, including filing for bankruptcy the worst thing you can do is not tell the attorney the whole truth. Hiding assets, failing to disclose transfers, under-reporting your income and other falsifications can not only put your fresh start at risk, it is also a crime. When you file a bankruptcy case the petition and schedules are signed under the penalty of perjury. So, if they aren't accurate you are essentially lying to the Federal Court - not good.

The more information the bankruptcy attorney has from the start, the better the attorney will be able to help you. Most situations that a client thinks is bad, and is scared to tell their attorney about are not a big deal as long as the attorney has the information. Once the attorney has the information they can help the client find a solution that works. I once had a Chapter 7 client who told me they lived in a manufactured home as a renter and had no ownership interest. Before filing the case a routine property search was done and it turned out the client was on the title as an owner of the manufactured home. I asked the client why they didn't tell me about that and the client told me they were afraid they would lose it in the bankruptcy. The home was 100% exempt, which means there was no chance of the home being liquidated or affected in bankruptcy. I explained this to the client, discussed why it needs to be disclosed and made sure the client understood the implications of not properly disclosing everything. The Chapter 7 case was filed, the home was protected and the client got their discharge and fresh start. Basically, everything was good and the client was debt free. Had the client's case been filed without disclosing the protected asset there could have been a disastrous outcome, including losing the discharge and possible criminal sanctions.

So, remember - your bankruptcy attorney can only help you if they have all of the relevant information from you. When they ask you questions, listen carefully and answer honestly. If you have a doubt whether the attorney needs a certain piece of information just tell the attorney. An experienced bankruptcy attorney will be able to tell you whether it is an issue or not. If it is an issue there may be a solution. But, the attorney can't find a solution unless they have all of the information.

For more bankruptcy information visit Our firm is devoted 100% to helping individuals file cases under Chapter 7 and Chapter 13.