Everyone knows the seriousness of the attorney client privilege and just how fundamental it is within the framework of our legal system, but one thing that isn’t readily apparent is whether or not this privilege extends towards a client’s worksheets. This is a question that both debtors and chapter 7 bankruptcy lawyers have asked themselves: does the other side get to see such important documents?
What exactly are these documents and why are they so important? These client worksheets are generally provided by the attorney whenever they take on a new client for a chapter 7 bankruptcy hearing. The client will fill the worksheet out, answering questions such as how much their assets are actually worth, what their income history looks like, what their living expenses are, and what kind of property transfers they’ve had over the years. Once the client completes this worksheet, the bankruptcy attorney will use it to fill out court documents.
Once the court documents are completed, the client signs these under oath at the law office before the lawyer files them in court. Afterwards, they’re available as public filings.
This may cause an issue if the creditor goes to the judge with a claim that the person who owes the debt may have been dishonest about how much property they actually own or what their assets are actually work. They can ask to have the worksheet disclosed in order to see if there are any sort of discrepancies between what is found on the sheet and what is found in the public documents.
Once this happens, the lawyer working on behalf of the debtor will tell the judge the sheet is protected under the attorney client privilege and is therefore completely immune from discovery. The common response to this is that because the worksheet was filled out specifically for the purpose of filling out court documents that will become public, there is actually no reason the creditor would have had an expectation that the information on the worksheet remain private.
While it’s true that the ruling for these sorts of situations can come down on either side, it’s important to understand that generally the bankruptcy attorney and client privilege will hold out in a court of law in most situations.
There was a recent case 2016 case in Florida (In re Stickle, No. 14-19551-BKC-PGH) involving a debtor who had been sued prior to the filing of their chapter 13 for some of their real estate trusts. The creditor argued that the payment plan that had been set up was based on allegedly false statements. Wanting to prove this in court, they wanted to use the worksheet. It was ruled that attorney-client privilege protected the worksheet as long as the client fills it out with the expectation of privacy. It was argued that it’s very possible for a debtor to have included information on the worksheet that was never actually intended to be made a part of a public record. While in this case, the debtor didn’t actually prove an expectation of privacy, they were given the option of submitting evidence that they filled out the sheet in an effort to obtain counsel.