David M. Siegel answers in 39 seconds. Watch on YouTube · Read the transcript.
Short answer: Yes. Bankruptcy is for the honest debtor, and full disclosure is the price of admission. Every asset, every liability, any property someone is holding for you, anything you gave away for less than fair market value, any inheritance you expect — all of it goes to your attorney up front so it can be addressed properly.
Bankruptcy is for the honest debtor
That phrase is not a slogan; it is the organizing principle. The discharge is an extraordinary remedy — a federal court erasing what you legally owe — and the price is complete candor about your financial life.
Meet that standard and the system is generous. Fall short of it and it turns unforgiving fast, because the one thing that reliably produces a denied discharge is concealment.
The items people forget
Assets everyone remembers: the house, the car, the bank account. The ones that get missed are more interesting. Property someone else is holding for you — a car titled in your mother’s name that is really yours, tools stored at a brother’s house. A tax refund you have not received yet. A lawsuit you might win. A security deposit. A vehicle you cosigned.
An inheritance you expect counts too, even if nobody has died. If someone leaves you money within six months of filing, it can become part of the estate.
Transfers are the one that causes real trouble
Anything given away or sold for less than it was worth has to be disclosed, going back years. People do this with the best intentions — signing a car over to a daughter, adding a child to a deed, repaying a loan from a parent before filing.
Trustees look specifically for these, and they can be undone: the trustee sues the person who received the property. Nothing ruins a family faster than a relative being sued over a car they were given. Disclosed in advance, almost all of it can be planned around. Discovered later, it is a problem for everyone.
Your attorney is not the person to protect
Everything you say is privileged, and none of it produces judgment. What it produces is a plan. The item you are worried about is usually routine, and where it is not, there is almost always a lawful way to handle it — wait three months, choose a different chapter, structure the filing differently.
Those options only exist before the petition is signed. At the meeting of creditors you are under oath, and by then the choices have been made.
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Full transcript of the video
do I have to tell the court everything if I file for bankruptcy the answer is yes bankruptcy is for the honest debtor you want to be straightforward and upfront with your attorney on all of your assets all of your liabilities where you may or may not have property if anybody’s holding any property for you if you gave something away for less than the fair market value if you expect an inheritance all these items need to be disclosed to your attorney up front so that they can be addressed in your petition and of course when you appear at your meeting and you’re under oath of course you want to answer all the questions truthfully honestly and to the best of your ability
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About the author. David M. Siegel has represented consumer bankruptcy clients in the Northern District of Illinois since 1991 and is the author of several books on consumer bankruptcy. The firm has offices at 790 Chaddick Drive, Wheeling, IL 60090 and 10540 S. Western Ave, Suite 202, Chicago, IL 60643, and handles cases by phone for clients throughout the Chicago area.
This article is general information about Illinois and federal bankruptcy law. It is not legal advice, and reading it does not create an attorney-client relationship. Every case turns on its own facts — speak with an attorney about yours.