What You Should Know About Disclosure In Bankruptcy Law

Most bankruptcy cases are uncomplicated proceedings, at least as anything involving the law might go. However, disclosure is one area where things can get complex. Let's look at what disclosure is and when it might be an issue of importance in bankruptcy law.

What is Disclosure?

The court has the right to order you to disclose all materially relevant information about your financial situation during a bankruptcy case. Normally, a bankruptcy lawyer tries to frontload as much of the disclosure as possible. This typically covers things like disclosing your recent income based on tax documents and pay stubs. Likewise, you'll need to disclose your debts if you want the court to consider discharging them.

Who Can Demand Disclosure?

Ultimately, the decision regarding disclosure always falls to the judge handling the case. However, creditors have rights, and judges will do everything in their power to protect the creditors' rights. Particularly, the court will want to be sure you should be filing for bankruptcy.

For most people, this will be a simple process. Many people qualify for a relatively expedited Chapter 7 process, for example, based on their income relative to their state's median income. The judge may need you to disclose more materials, though, if there are doubts about whether you qualify or if a specific claim of a debt or income is correct.


Broadly speaking, the court should only demand you disclose documents material to the case. A judge can't insist you include your second-grade report card, for example, because it has nothing to do with determining your eligibility under bankruptcy law. Conversely, a court would have significant room to demand disclosure of personal and business account transactions to verify a petitioner didn't transfer assets.

Sealing Disclosed Materials

In some cases, you may have to disclose materials you don't want to have readily available in the public record. This is a more common problem for businesses and high-net-worth individuals, but anyone might have this concern.

The typical remedy for such disclosures is to seal them. However, the court will only do this if you ask. Likewise, the judge doesn't have to grant the request if they believe, for example, the public would benefit from knowing.

Sending Disclosure Materials

A bankruptcy lawyer will want to get disclosure materials to the court as quickly as possible. Some liquidation cases move through the courts in a matter of weeks, and many restructuring cases wrap up within a few months. The judge will want disclosures out the way early.