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they may need to bear the additional cost to access the bankruptcy system.
2. Attorneys must explain the benefits, burdens and consequences of bankruptcy to their clients to the extent reasonably necessary to permit informed decisions about the case. Attorneys are to render candid advice to their clients, referencing moral, economic and other factors relevant to the situation. They must explain that bankruptcy in any of its forms has serious repercussions for any client. Credit agencies will be informed, and can disclose the fact of any filing as long as ten years after the order for relief is entered. A debtor's post-bankruptcy insurers and lenders may consider a prior bankruptcy in evaluating the prospect of extending insurance coverage or a loan. The Code only protects against certain types of discriminatory treatment resulting from bankruptcy. The debtor must realize that in return for the protections of the bankruptcy laws, he must disclose his financial affairs in minute detail, fully and accurately, or he will be denied a discharge. The court may require conversion of a chapter 11 case to a chapter 7 liquidation, which the debtor cannot prevent through voluntary dismissal. Prospective debtors must be informed about the alternatives to bankruptcy, the options they have under various chapters of the Code, and what is required of them in each. Professional conduct rules require that a lawyer, not a paralegal, must undertake this counseling through direct client contact. Counsel has a duty to fully explain the scope and reach of terms used in bankruptcy schedules, such as "transfer."
3. The 2005 Bankruptcy Code amendments define lawyers providing
This outline is adapted from Chapter 27, Ethical Responsibilities, Norton Bankruptcy Law & Practice 2d (Thomson-West 2005)
