I deal with bankruptcy issues all day long. I think about bankruptcy. I read about bankruptcy. I file bankruptcies. And because of this sometimes I am afraid that I may lose sight of the fact that my clients simply don’t. My goal as a lawyer is to provide my clients with information about the bankruptcy process and then guide them through their court filing – hopefully with as little pain as possible. In reviewing how I do this I have come up with five tips that will help you and your bankruptcy lawyer as you proceed with your case.
#1 – Be as Detailed as You Can
The typical bankruptcy filing is about 40 to 60 pages long. Why? Because there is a ton of information required by the bankruptcy court. Information on income, expenses, assets, debts, transactions, etc. The information that is disclosed needs to be as detailed as possible. If you have a 2005 Chevy Suburban let your bankruptcy lawyer know as much as detail about it as you can. How many miles does it have? Is it the LS model? Is it four wheel drive? Does it have mechanical problems or body damage?
When you disclose your income provide all of the documentation requested. If your attorney asks for 6 months worth of paystubs don’t provide 5 months and 2 weeks worth. Provide 6 full months worth. It may seem like a big hassle (and actually it usually is a big hassle to gather all of the needed documents) but the more detailed you can be generally the smoother your bankruptcy case will go.
#2 – Disclose Everything
Disclosure is the name of the game when it comes to bankruptcy. Here in Arizona there are about 30,000 to 40,000 bankruptcy cases filed per year. Obviously with that many families filing for bankruptcy the court cannot personally visit each home and take an inventory of your assets. Because of this the system relies heavily upon you fully disclosing your assets and provides harsh penalties for failing to disclose (i.e. you can actually go to jail).
Tell your attorney everything. Your bankruptcy lawyer does this day in and day out. Let him decide what is important and what is not. Your job is to disclose everything and then let your attorney sift through it. Too many times I have clients that will disclose something right before the filing of their case (or even worse something is disclosed shortly after the filing of the case) because they didn’t think it was that important. If you haven’t gone through the process before you may not be fully aware of what is important and what is not. When it doubt, disclose…actually, just disclose period…doubts or no doubts.
#3 – Don’t Ask Your Attorney to Lie for You
This tip goes along with disclosing assets. Don’t ask your attorney to lie for you. Some people mistakenly believe that because there is an attorney/client privilege that their bankruptcy attorney will help them in concealing assets. It ain’t gonna happen. On rare occasions I have people tell me about an asset and I let them know they will lose it through the bankruptcy process. This is then followed up with the question “well, how will the court even know about it?" I then respond by saying “well, because you just told me about it and I am going to disclose it." This is followed by some awkward silence.
There are a million reasons to be completely accurate in your bankruptcy filing. It is a crime not to. You can lose your discharge. Your attorney can lose his/her ability to practice law. And on and on. You know you have to disclose everything. Just be prepared for it and understand that the more you disclose the better your bankruptcy lawyer can protect you. The times when my hands are tied is when something is disclosed for the first time well into the case. At that point there may not be anything I can do.
#4 – Communicate Changes in Your Life to Your Attorney
Communication with your lawyer is vital to a successful bankruptcy. This is especially true in a chapter 13 bankruptcy. Chapter 13 bankruptcy cases last anywhere from three to five years. During that time any changes in your income or expenses can greatly impact your case. I have had chapter 13 clients who have nearly had their cases dismissed because they have had a drop in income and can no longer make the required monthly chapter 13 plan payment. Too often they come to me after-the-fact where if they would have let me know when things got bad I could have alleviated a lot of worry.
Regardless if you are in a chapter 7 bankruptcy or a chapter 13 communicate with your lawyer. If you want to sell something, run it by your bankruptcy lawyer first. If you need a new car, talk to your lawyer. If you lose your job, shoot them an email. Often clients deal with a lot of stress and needless worry that could be taken care of if it was shared with their lawyer.
#5 – Don’t Freak Out
Bankruptcy can be a stressful. It also happens to come at one of the most stressful times of your life – when you are dealing with financial chaos. Bankruptcy is meant to bring some order to dealing with your debts. As soon as your case is filed with the court an order is issued that stops all collection efforts against you. However, even while you are in bankruptcy there can be pressures from the court, your bankruptcy trustee, and even your creditors. The thing to remember in bankruptcy (and in most court proceedings) is that things rarely happen quickly. If you have a trustee or a creditor that raises an objection you will have an opportunity to respond to it before anything happens.
Let your attorney shoulder these pressures. Trust me, your lawyer will let you know when they need your assistance in gather documents or whatever else is needed to keep your bankruptcy case on the right track. Often I have clients who completely lose their minds over something they receive in the mail from the court and then when they call me they learn that what they received was just a routine part of the process.
Be detail oriented. Disclose everything. Don’t expect anyone to lie for you. Communicate. And don’t freak out. These five tips will help you, help your attorney, and help you get through the bankruptcy process as smoothly and stress free as possible.
Image Credit: Purplemattfish.