Damned if you do, broke if you don’t.

That’s the tough love I often must tell a client who wants to file for bankruptcy after some sketchy financial business.

Actually, it could be: Jailed if you do, just broke if you don’t.

Here’s the problem:

First, the client may have signed documents in a mortgage, credit application, or divorce litigation that swear to one list of assets and liabilities.  But then she wants to sign a bankruptcy petition with not quite the same list if you get my drift.  This is a prosecutor’s dream – two statements under oath that flatly contradict.

Second, even when a client does not have that glaring problem, he still exposes all of his finances for examination by a bankruptcy trustee.  And it can be the equivalent of a full physical examination, x-rays and colonoscopy included.  If there’s a false statement in there somewhere, it’ll be found.

I gave a longer speech about this to a gathering of a couple hundred bankruptcy lawyers last month  – here is the short manuscript spelling out the dangers of filing bankruptcy after misbehaving. Download The Danger of Being Underoath PDF.

Bankruptcy Lawyer in Charlotte, NC

If you’re in this situation, get advice from a bankruptcy lawyer (and me) before filing.