Bankruptcy confidential: 5 secrets you must tell your bankruptcy attorney

If you’re considering declaring bankruptcy for debt relief, you may feel like you’re in it alone. Just you against the legal system, with all of the rules that you don’t yet understand. Plus, you may be embarrassed to talk about your financial problems, especially with strangers. Perhaps you’ve put off contacting a bankruptcy attorney because of it.

This fear and embarrassment is common — almost universal. Practically every new client approaches their first meeting with a bankruptcy attorney warily, and most have to be encouraged to share all the specifics of their situations.

But your bankruptcy attorney is your partner in the process, duty bound to help you get the best possible debt relief outcome. And while you may not want to share all the nitty-gritty details with someone that you’ve just met, remember — bankruptcy attorneys have heard it all before. We’ve seen every combination of debts and assets, every financial difficulty, anything you can imagine. And while you may feel like the only one that’s gotten into this mess, the scores of smart, responsible, well-meaning people declaring bankruptcy have proven that even the best people get into financial trouble sometimes.

So the worst thing you can do is hide anything from your bankruptcy attorney. Anything that is incorrectly reported when declaring bankruptcy can cause big problems, from a delay in granting the claim to having your activities be considered fraudulent, which can lead to fines and jail time. Here are five things that you must share with your bankruptcy attorney, and the reasons that you must be completely honest to get the best bankruptcy advice and maximum debt relief protection you’re entitled to.

1. All of your income and financial assets — including retirement plans, legal judgments and every bank account. Some people try to protect money from being seized by not disclosing it, or giving money to friends or family members to hold. The problem with this is that many of these accounts — checking accounts, savings accounts, investment accounts and more — will appear on your credit report or other public records. The courts routinely check these sources of information to make sure all parties are playing fair. Hiding assets can lead to fines or even jail time, and can keep you from being granted debt relief at all.

2. Property you want to protect. You may be tempted to transfer cars, real estate, jewelry or other valuable property to others to keep them during the debt relief process. Some people choose to sell these items for a few dollars or simply give them away. There are two problems with this approach. First, many of these items would already be protected from seizure in a court proceeding, so you may be able to keep them anyways. Second, the court will scan other public records such as automobile title transfers and real estate property records to look for assets in your name and may find these transactions. The court not only has the power to pursue this property and attach it to your claim, again they may find your behavior fraudulent and levy fines or dismiss your case.

3. All of the debt that you have. The purpose of declaring bankruptcy is to eliminate as much of your debt as possible so that you can get on stronger financial ground. The process doesn’t work if you don’t disclose all of your outstanding creditors. Tell your bankruptcy attorney right away about any and all debt that you know of — credit cards, auto loans, student loans, alimony, child support, legal judgments, notice of garnishments, medical bills, etc. Your attorney’s job is to determine how best to get you maximum debt relief, and he can’t do that without the full facts.

4. What you’re making payments on — and what you’re not. The process for declaring bankruptcy does take a little time, so you can’t completely stand still while you wait for its protections to kick in. By discussing your personal financial situation with your bankruptcy attorney, he can advise you on how to manage your finances in the short term, including which bills you should pay, which you should not, and where the money should come from to make these payments. Many people make critical mistakes trying to pay off as much debt as possible prior to consulting with a bankruptcy attorney. If you believe you will require debt relief in the future, it’s better to consult a bankruptcy attorney early, before you lose assets, income and property that you could have otherwise kept.

5. Anything that you’re afraid will keep you from bankruptcy protection. If there’s anything that you’re afraid to tell your bankruptcy attorney, tell him that first. Many people are tempted to hide previous bankruptcies, upcoming financial windfalls such as inheritances or legal settlements, personal situations that impact their finances, business interests, and more. This is never, ever a good idea. If these situations come to light during the proceedings, they can delay your case, lead to additional legal fees to amend prior filings, cause you to lose property that may have otherwise been protected, and once again end in fraud charges. It’s your bankruptcy attorney’s job to advise you on the best way to protect your financial future, and he can’t do that effectively without all the facts.

The best way to get the debt relief you’re looking for through declaring bankruptcy is to let your bankruptcy attorney do his job. Provide him all the information you have, answer questions truthfully, and let him figure out the best way to protect the things that are important to you. Our Ohio Bankruptcy Attorneys can advise you on the best way to get started, and the consultation is confidential and absolutely free. Contact us to schedule your complimentary debt relief review.