Every effective bankruptcy lawyer needs a line, a phrase, or a story to squelch the client’s instinct to exclude things from their bankruptcy filing. Often the client’s desire to be less than forthcoming is born of fear or ignorance. Your job is to figure out which it is and overcome it.
Clients sometimes confuse “include” in the bankruptcy with “discharge” in bankruptcy. When they tell you they don’t want to include a debt, they are indicating that they expect to repay the debt.
Fine, I tell them. We list everyone, because that’s what the law requires and you sign the schedules under penalty of perjury. Pay who you will and what you can afterward; tell the whole truth now.
Sometimes, the debtor fears embarrassment or some sort of retaliation as a result of listing a debt in the bankruptcy papers. Perhaps alerting a family or friend in advance of the filing, at a time of the debtor’s choosing, will lessen the hesitation to be forthcoming. Perhaps it’s a story of debtors who lost their discharge because they swore falsely that they had included every creditor. It happens.
It’s a cardinal rule of bankruptcy that you list all creditors. Period.
Clients who are unwilling to do so are shown the door.