Tell your attorney the truth. The more your attorney knows about your situation, the better the attorney’s advice will be. That includes everything from disclosing all of your assets and income to answering your attorney’s questions completely and accurately.
Bankruptcy attorneys can get a lot of basic information about clients’ debts and assets by reviewing credit reports and public records. However, they depend on their clients to tell them if they have hired an attorney to pursue a personal injury claim against someone, to tell them if they owed money to a relative and paid the relative back while not paying other creditors, things which the attorney would not know if their client did not tell them.
Occasionally, someone decides that they will keep an asset hidden, or get away with concealing important transactions or secondary sources of income, only to find that a disgruntled former partner or former friend learns of the bankruptcy filing and contacts the trustee to tell the trustee about things the debtor did not disclose. In the event the trustee investigates and determines that the debtor has knowingly failed to disclose assets, income, or transactions which were required to be disclosed, bad things will happen. The debtor not only risks being denied a bankruptcy discharge, but also may be charged in federal court with a bankruptcy crime. Bankruptcy crimes are investigated by the Federal Bureau of Investigation, and prosecuted by the United States Attorney.
Telling your bankruptcy attorney everything you know to completely and truthfully answer the attorney’s questions is absolutely the most important thing to do when preparing to file for bankruptcy.
