The Truth is Your Best Friend in Bankruptcy Court, But You Don’t Need to Tell Your Life Story
When appearing in Bankruptcy Court, one always should tell nothing but the truth. Even a small misstatement can get you into a large amount of trouble. And while it is only truth that should be told, there are ways to tell the truth, some better than others.
One example is a question that is usually asked at a Creditors Meeting: “What is the largest balance you have had in a bank account in the past two years?” If the answer is, say, $800.00, say $800.00 and stop.
I saw one person in Bankruptcy Court yesterday add: “But three years ago I had $96,000 in the account.” He was not asked about that, and there was no need to add that. What will happen now is that he will have to explain, in great detail, where the money came from, and where it went. From talking to his attorney after the session, it seems the money was from a second mortgage, a home equity loan, which was used to pay off some medical debts and do some repairs on his house. None of this will be a problem once he explains, but there was no need to add to his answer.
I tell clients that if they think there is something they want to add to an answer beyond what was asked, they should resist the temptation. They should answer the question that was asked truthfully, simply, and stop. Of course, if there are things you are not sure about you should talk to your lawyer ahead of time, but it will only be the the truth that should be told in Bankruptcy Court.
Allan Bloomfield practices bankruptcy law in Forest Hills, Queens. Contact Allan today for a free consultation.
