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N Is For Naked

We come into this world naked. So, too, in the world of the bankruptcy alphabet.

When you file for bankruptcy, you’re required to disclose all of your assets and your liabilities. You’ve got to disclose many of your financial transactions over the past few years. Note that this is not a choice – it’s an obligation.

I tell my clients that bankruptcy requires you to walk into the system naked. All of your flaws, faults and foibles are on display. Nothing is hidden, zero left to the imagination.

Will that thing you did last year be a problem? I can give you an answer only if I know before your bankruptcy case is filed.

If it’s going to present an issue then let’s deal with it before the case goes into the court system. Maybe the issue is small, perhaps it’s large. If it’s too big to handle then we may need to look at alternatives to bankruptcy. We might need to wait a little while longer before we file.

Either way, we can’t plan if we don’t know.

Think you can hide something from the bankruptcy trustee? Think again. Not only is the trustee far smarter than you think, he or she also has access to the Internet – that magical place where there are no secrets.

More to the point, there’s a chance that someone’s got an axe to grind. The jilted lover, former business partner or frenemy shows up at your bankruptcy hearing with revelations about something you should have disclosed in the first place.

As my friend Cathy Moran says, we can protect only those things we know about. If you’re not naked, you’re not doing yourself any favors.

Image credit: Leo Reynolds

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By |November 19th, 2011|

About the Author:

I've been a consumer protection lawyer since 1995, working to help people end their bill problems. I'm a faculty member at the Student Loan Law Workshop, a nationally recognized speaker, and a long-time member of both the National Association of Consumer Bankruptcy Attorneys and National Association of Consumer Advocates.
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