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March 7, 2010

Everything I tell my Bankruptcy Attorney is Privileged, Right? 1

Filed under: Bankruptcy — Barry @ 7:09 am

The question of Attorney-Client Privilege is often asked by prospective clients thinking about filing bankruptcy.

There are several exceptions to privilege.  One of these is where the information is to be disclosed in a public document such as a bankruptcy petition.   In bankruptcy there is little privilege and perhaps even worse, little case law about what constitutes waiver of the attorney-client privilege.   An interesting article was recently published about a 2010 North  Carolina Bankruptcy Court decision, that further cut back on attorney-client privilege.

Luckily, this case is not binding on bankruptcy courts in California. You need to clarify with your bankruptcy attorney what will and will not be priviledged.

Usually, priviledged matters are matters which are not intended to be released for public consumption. The problem is that virtually anything you bring to your bankruptcy attorney, if it will end up in your bankruptcy petition is ultimately public. What does this mean for the average client? If you tell your bankruptcy attorney that you murdered your mother… this will in all liklihood be priviledged. But it will in all likelihood not be priviledged if you tell your bankruptcy attorney that you have $10,000 in an offshore bank account that you don’t want to disclose in your petition. Sure your attorney may not disclose this resulting in a crime for both the client and attorney. The best thing is to be honest and know the limits of where attorney-client priviledge begins and ends.

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