What to Tell People When You File for Bankruptcy

Dec 18, 2019 | Bankruptcy, Chapter 11 Bankruptcy, Chapter 13 Bankruptcy, Chapter 7 Bankruptcy

The old saying has something to do with never discussing politics and money in polite conversation. Let’s take it a step further and never discuss those two under any circumstances unless it’s absolutely necessary.


Even comments on Youtube videos degenerate into angry political side-taking. It’s unreal. It’s pointless. It’s impolite. It’s uncivilized. Society doesn’t have to divide into factions. You don’t have to fire the kid that cuts your grass because his dad is a Democrat. You don’t have to disown your friend because he voted for Trump.

It truly is okay to befriend someone who disagrees with you on matters such as politics and money. These things don’t define people – or at least they didn’t. So let’s all relax.

Eugene McCarthy said it best about politics.

“Being in politics is like being a football coach. You have to be smart enough to understand the game, and dumb enough to think it’s important.”

When it comes to money, however, it’s incredibly important. Money is the key to survival in modern times. Try living completely off the grid sometime and see how that goes. It even takes money just to get off the grid in the first place.

Bankruptcy (which obviously is a money matter and to a lesser extent a political one), is not something you have to discuss with others unless you choose to do so. If you don’t want to discuss it, just tell them it’s…

None of Your Business

It’s really okay to tell somebody you would just rather not discuss it. Your bankruptcy is your business – period. If somebody is offended by that, then that someone needs a reality check – and they need it badly. Now don’t you go and try to be the one that puts him in his place. Leave that for somebody else. You put your nose to the grindstone and get that bankruptcy finalized and move on with your life.

It will create a bit of an issue if you tell absolutely everyone that it’s simply none of their business. There are a few people you must be brutally honest with. Here they are in no particular order.

Your Attorney Has to Know

Your attorney. He or she needs to know absolutely everything about your financial situation. You’ve got to disclose your assets, your income, your spending, and every other infinitesimal financial detail. If not, how are you going to receive adequate representation? Your attorney has to know absolutely every single little thing about you, because if not, grievous strategic (and therefore financial) errors could be made.

Don’t be one of those wiseguys who charges a trip Fiji on a credit card weeks before filing for bankruptcy. Guess who gets to pay that money back or his case gets dismissed? You, if you are one of those people. We won’t call you “dumb” for trying to defraud your creditors in such a blatant way, but we won’t not call you that either.

Did you happen to neglect to offhandedly mention that you operate a horse farm on the land you own? Sound too specific to be hypothetical? You bet. Let’s just say the bankruptcy trustee hired a private investigator to take pictures of the property and document things like lots of people riding horses who just happen to also be receiving lessons from riding coaches who just happen to be teaching on your property that says “horse farm,” right on the front gate. They just happened to be riding horses that were also born on that property years ago as part of the… oh yeah.. that horse farm business. I’m pretty sure you wouldn’t legitimately forget that you had an actively running horse farm on the property where you live day in and day out.

So yes, there are things you need to disclose to your attorney – and by “things” – we mean every things!

It doesn’t stop there.

The Bankruptcy Trustee Has to Know

You’ve got to honestly answer any questions that the bankruptcy trustee asks you as well. He or she will know a lot about you already if you are honest with your attorney, because your bankruptcy petition will include vast details about you based on what you’ve provided.

You will have to attend a meeting of creditors where your trustee will ask you questions under oath. That means you must honestly answer the questions. An oath is not to be taken lightly. You’ve got to raise your right hand after all! That means it’s serious!

Seriously though – if you answer a trustee’s question under oath and you get caught in a lie, you’ve got yourself some problems. By “problems” we mean stuff like fines and jail time. So by all means, take the oath seriously and be honest with your trustee.

There is one other person (or group of persons) you’ve got to honestly tell your story to. That’s the US Trustee.

The US Trustee Too?

US Trustee? Didn’t you just talk about him for the last three paragraphs?

Well, it’s actually two different trustees. The local bankruptcy trustee specifically deals with all the details of your case and conducts the trustee meeting we already discussed. The US trustee is the agency that oversees the whole process. When you file, you may not realize the US trustee even exists. But, if that office detects an issue with your case, you will undoubtedly hear from them. If you aren’t honest with them and fully disclose your information, or if they determine that you weren’t honest with the local trustee or your attorney, guess who’s got problems?

You do.

The US Trustee will drop the hammer on you. Your attorney will do his or her best to keep you out of trouble, but at best there’s a good chance your case will get dismissed. At worst, fines and jail.

Get the picture?

If any of these folks ask you about your bankruptcy, you tell them all you know – and you do it with detail and with honesty.

What if I Feel Like Talking About It?

Sometimes it’s best to let somebody else do the talking for you. Moses led the Israelites to freedom from Egyptian bondage, and yet even he used Aaron to do the talking for him. If it was  a good enough strategy for Moses, it should be good enough for you.

There are plenty of great websites detailing all that anyone ever wanted to know about bankruptcy (may we recommend arizonabankruptcyhelp.com). It doesn’t hurt to let others do the “splaining” for you. Don’t be like Lucy from I Love Lucy. Her explanations just got herself into more trouble as she went along.

Unless you can resurrect Johnny Cochran and have him plead your case, less is more. The curious can do their own investigation. This also keeps it from becoming personal. If they really want to know your personal feelings about it, it might be time to invoke the nunya clause – as in – it’s nunya business.

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You can contact an experienced bankruptcy attorney at Meyer Law for a free consultation.

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