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So, you’ve made the crucial decision to file for bankruptcy and have done your due diligence to find a competent, experienced bankruptcy attorney to represent you. Bravo! You’re understandably nervous about the process and wondering what the next step is. It’s actually easier than you think. The number one rule of thumb is–be honest. Honesty truly is the best policy when it comes to declaring bankruptcy.
In order to represent you effectively, your attorney is going to need to know everything about your financial situation. It’s imperative that you fill out any forms requested and get him or her every single piece of information needed, even if it doesn’t seem all that important to you. These forms and information will provide the starting point for preparing your bankruptcy petition, schedules, and statement of financial affairs. Under Chapter 7 bankruptcy, this will determine what you can keep, what assets you need to surrender, and who gets paid or discharged. Under Chapter 13 bankruptcy, it will dictate how much your payments under the plan will be and for how long you be making them.
Intentionally leaving out an asset means running a very big risk of getting bumped out of bankruptcy completely–or even doing jail time. Even leaving out a debt unintentionally means that debt will not be discharged and you will be forced to pay it after the bankruptcy ends. Even having paid a creditor or transferred property recently can affect your bankruptcy proceedings.
The bottom line is yes, you have to tell your bankruptcy attorney everything about your finances, down to the smallest and seemingly least significant detail. Your attorney can sort out the best way to deal with the issue and help you avoid problems down the line. Remember that’s what you hired your attorney for! Let your attorney earn his or her keep–by keeping you out of even more financial trouble.
And for those who haven’t yet retained experienced bankruptcy counsel, please contact a Dallas/Ft. Worth bankruptcy attorney to find out more information. They are standing by and ready to start earning our keep by helping you out today!
August 31st, 2009 at 5:30 pm
People’s misconceptions about the consequences of full disclosure are a barrier to effective representation. If someone discloses everything then their attorney can arm them with information about how the nuances of bankruptcy law apply to their financial situation; on the other hand, if they choose not to disclose information to the person who is supposed to acting as their advocate then they have single-handedly made their situation worse instead of better.
September 1st, 2009 at 11:22 pm
There is the tendency to withhold information and hope for the best. That is not the best strategy. You are paying your attorney for advice and counsel. If you are afraid of losing assets in bankruptcy and you don’t disclose them to your attorney you are making a bad situation worse. Your attorney can give you advice on how to ethically protect the property using exemptions and pre-bankruptcy planning. Your attorney knows where the line is between acceptable pre-bankruptcy planning and bankruptcy fraud. You don’t want to turn a civil matter to discharge debt in bankruptcy into a federal crime.