Confidential Client Information

Courts are split as to whether attorney-client privilege exists between attorney and client in a bankruptcy proceeding.

The United States Supreme Court has held that corporations filing for bankruptcy surrender their attorney client privilege to the Trustee of their bankruptcy case, however whether this applies to individual in bankruptcy is not as clear.

In a bankruptcy case, the Trustee takes over the interests of the Debtor. Using this concept, some courts believe that the Trustee therefore owns the attorney client privilege and may choose to waive the privilege. Other courts however have held that the attorney client privilege always remains with the individual Debtor and may never be waived by the Trustee.

A case out of Ohio resulted into the Trustee pursuing a malpractice claim against Debtors attorney for advising the client on how to conceal assets from the bankruptcy court. Given that the malpractice claim would increase the Debtors estate, the court found that there was no adversity of interests between the Trustee and the Debtor and therefore, privilege could be waived.

Bankruptcy is about getting an honest person a fresh start. Go in to your attorney and tell them your situation. They can best advise you on your situation. Hiding assets from your attorney will only cause problems for your when the trustee discovers them. To prevent any issues be upfront and honest with both your attorney and the trustee of your bankruptcy estate.