Be sure to tell the truth, the whole truth, and nothing but when it comes to advising your attorney about your financial picture.
When meeting or speaking with your attorney you will often be asked a number of questions. Each question asked by your attorney is being asked because it is relevant to your bankruptcy case, and it is likely information that will need to be disclosed on your petition.
Your attorney will ask you questions such as:
- Do you own any real estate? Have you ever owned any real estate?
- Have you paid back any family or friends over the last year?
- Have you sold or transferred any property?
- Have you taken any recent cash advances from your credit cards?
- Do you have any stocks or bonds? What bank accounts do you have?
- Have you been in business for yourself at all in the last six years?
Failure to tell the whole truth can have serious consequences: any knowing or fraudulent concealment or false statement is punishable under federal law. The U.S. Attorney’s office, and the Federal Bureau of Investigation—yes, the FBI—investigate bankruptcy fraud, and a conviction comes with up to a $250,000 fine, up to five years in jail, or both. Your discharge can be denied as well, and typically the discharge is the main reason people file bankruptcy in the first place.
Keep this in mind as you assist your attorney in preparing your case and as you testify at your meeting of creditors. Is concealing a sum of money or some asset really worth risking prosecution, time in jail, and hefty fines? If so, then bankruptcy will not be an option for you.