My good friend, California Bankruptcy Attorney Cathy Moran, wrote a blog titled, “To Tell the Truth,” talking about all of the information that is now required from clients to file for bankruptcy. Cathy correctly notes that, “Calling for gobs of only marginally relevant information was one strategy that creditors included in the bankruptcy “reform” legislation to deter people who needed bankruptcy relief from getting it. They claimed it was to deter fraud; in reality, they counted on the debt ridden to be disorganized, stressed, and discouraged.”
Many people thinking about bankruptcy are indeed stressed and discouraged. Asking them to try and find information that, even if available, is likely to be irrelevant to their case, just adds to their discomfort and confusion. And we certainly ask for lots of stuff--paystubs, tax returns, car titles, bills, credit reports...and questions down to whether you own any pets! (My favorite is the question asking whether the filer “owns or has possession of any property that poses or is alleged to pose a threat of imminent and identifiable harm to public health or safety.” Asking this question usually results in the response, “Huh?”)
But the name of the game here is “Disclosure, Disclosure, Disclosure.” Disclosure, even of irrelevant but required information, serves a number of purposes:
It’s required by the law.
It shows that you have nothing to hide and makes you look truthful.
Looking truthful and not hiding anything makes the Trustees less likely to dig deeper by asking for more information at the Meeting of Creditors.
It helps your lawyer be informed—and things you don’t think are important may be. What your lawyer doesn’t know CAN (and probably WILL) hurt you.
In short, the more detail you provide your lawyer, the better and more smoothly your case is likely to go.