In the last two entries, I shared my observations of honesty and dishonesty in the bankruptcy process. It has been an issue that has been crawling under my skin for many months now. And in this last installment of Honesty and Bankruptcy, I explain why that is.
I’ve heard a local judge say more than once that a good lawyer knows what will happen in the courtroom, and what should happen in the courtroom before they walk into the courtroom. My clients don’t have that perspective. If anything, they have only their view of what they want to happen in the courtroom, or what they hope will happen. I am – for all intents and purposes – the reality check.
When I ask a client a particular question, it’s not because I’m sitting on some throne ready to pass judgment. It’s because I am looking for facts that will help me ascertain what can, could or would happen in a courtroom if I were representing that client. It also helps me formulate a plan for what should happen in the courtroom for my client’s objectives to be met. That is when my knowledge, training and experience comes into play.
No attorney may permit a client to lie under oath, and bankruptcy petitions and other related documents are signed under penalty of perjury. I could easily sit and meet with a client, ask questions, write down the answers, say “you’re telling the truth, right?” and then follow it up with a “here, sign this” and then let the client implode when their web of lies finally catches up with them. I leave that to other others who claim to “sell a service.” Instead, I actually do the job I am hired to do: make sure that the client doesn’t implode and gets the relief they deserve.
While I have represented both creditors and debtors, it may be helpful to think of me differently when I am representing debtors. Think of me as a boy scout. Feel free to picture me in the uniform with the beanie. My job is to help the debtor cross the street. I know the street, the neighborhood and the traffic – the debtor does not. My job is to get the debtor to the other side safely and soundly. And on the other side of the street is the fresh start.
Before we start crossing, it’s important I know everything and it’s important that the debtor understand what they need to so I can get them over to the other side. Before they step off that curb, the debtor has all the control. They can decide not to cross at any time. But once we take that step of the curb, in most cases, the only place left to go is straight to the other side of the street. If I don’t think a debtor can or should cross the street, the time to hear me say that is before we step off the curb; not half way in the road while fixated on a bus coming towards us quite fast.
I need to know about finances, assets, income, expenses. I need to know about transfers and taxes. I need to know a lot. And I need to know the truth…because debtors can and should assume that someone else knows the truth…or has easy access to it. Lots and lots of information is available on line. If I can find out about a lawsuit, certainly a trustee can. Covering up the truth would be strategically disadvantageous to the goal of safely getting to the other side of the street. Covering up the truth can also land the debtor facing criminal charges…and never getting to the other side of the street.
While the debtor may have made some profoundly bad decisions – perhaps even some dishonest ones that has led to the need to seek bankruptcy relief, the time for dishonesty ends the moment the debtor decides to seek bankruptcy protection. And any lingering penchant for dishonesty must end by the time a debtor decides to meet with a bankruptcy attorney and enter into the bankruptcy process.
Over the last couple of years, I’ve encountered more and more debtors who think they can lie their way through this process. There is this belief that not only can a debtor continue a charade of honesty in the bankruptcy process, but an expectation that counsel will assist them with it – and is obligated to (remember the client who recently said to me “I need an attorney I speaking with candidly”?). That may have worked in the buying, selling, flipping and refinancing of real estate – but it simply is not going to fly in the bankruptcy world. To put it bluntly, there’s no winking in bankruptcy.
Looking at blog archives, I see that much of my writing over the past four years has been about case law, trends and observations. Until now, I have never been compelled to use this space to publicly tell certain prospective debtors who are inclined to be dishonest to cut the crap. Bankruptcy relief is not an entitlement – it’s available only to the honest but unfortunate. And that relief is only available to those who are honest.
For everyone else, there are consequences.
- Honesty and Bankruptcy, Part II: Feeling Dishonest
- What Does a Good Bankruptcy Attorney Do?
- Still Think You Can File Bankruptcy Without An Attorney?
- Honesty and Bankruptcy, Part I: Day of the Living Dishonest
- The Refinance Reality Check