Should I Tell My Bankruptcy Attorney Everything?
You should tell your bankruptcy attorney every detail of your financial situation before any Chapter 13 or Chapter 7 is filed. Everything you tell your attorney is protected by the attorney client privilege. Don’t try to hide anything from your attorney! Your attorney is on your side. It is always in your best interest to disclose everything in your Chapter 13 or Chapter 7 petition.
Every now and then, I will meet with a client who after having paid all of their filing fees and after having spent two hours signing the petition will say, “There is something I want to get off my chest before we file the case.” Usually, it is something that either changes the entire case or changes the client’s mind about filing once I explain the consequences.
For example, I have met with a few people this year who inherited a significant amount of money within the past year. In one situation, a good portion of the inheritance was used to pay back a loan to a relative. Once I explained that a Chapter 7 trustee has the power to sue that relative and take back the money that was paid, the client no longer wanted to file Chapter 7 . Another example was an elderly grandmother who signed her house over to her granddaughter last year because she was afraid her creditors would go after her house. Again, this client was shocked when I explained to her that a Chapter 7 trustee has the power to take back the house, sell it, and use the proceeds to pay her creditors. It is a good thing these clients were honest with me so that we did not file any Chapter 13 or Chapter 7 for them and put them in a bad situation. Your attorney cannot explain to you all of the ramifications of filing bankruptcy if the you try to hide important financial details.
People who intentionally lie to their attorney and try to pull a fast one over the Chapter 7 or Chapter 13 trustee can end up being prosecuted by the United States Attorney. Its not worth it. Tell your attorney everything so that they can protect you from bad results.