Poor Financial Planning
I’m sure I speak for other attorneys in the field of bankruptcy and debt relief when I say you can never ask too many questions at the first interview of a client hoping to discharge their debts in bankruptcy. Although questions such as whether a client transfered money or property within two years are asked, the attorney should dig deeper to explore the different types of transactions which consititute such a transfer. A good example of this is when a client was asked this but failed to disclose that he helped his daughter purchase a house with money drawn from his retirement fund. Further prodding uncovered this fact when the client was asked if he put anything toward the purchase of the house he lived in. The proper advice would be first that he not drain his retirement. However, failing that, the advice that was given and followed was to execute a deed placing himself on title so he could exempt the asset. By failing to disclose this, the client risked swapping a fully exempt asset for a non exempt asset. As it turned out, the house was sheltered under the Bankruptcy Homestead Exemption.