08 Aug Bankruptcy and the urge to conceal
The “bankruptcy bargain” is simple: in exchange for full financial disclosure on the part of the debtor , the debtor gets the discharge of debts.
I felt like a Greek chorus the other day interviewing a client whose first reaction to any issue that presented a problem was to hide it.
“It’s not in my name”, “there’s no paper trail”, “I just won’t mention it”, was the client’s verse.
My chorus was that a debtor who wants a discharge rather than a long stay in federal prison needs to tell the whole truth.
A bankruptcy discharge is such a valuable opportunity: the chance to shed any liability for failed real estate investments and the credit card debt incurred to support those properties. The chance to begin a new marriage without debt that might threaten the new spouse.
Why would one risk losing that chance to start fresh by telling less than the truth?
For many people I meet, I think the urge to hide assets or transactions is based on ignorance. They don’t know that bankruptcy planning and exemptions can protect lots of assets. They have bought into the myth that bankruptcy leaves one naked on the street. Nonsense.
My job then is to coax the whole story out of the client and configure what I learn so that the client gets a discharge (rather than an indictment for perjury) and as many assets as possible to start over.
Image courtesy of pz-c-t.
Cathy Moran, Esq.
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