Asset protection is not about hiding assets; there is no secrecy in asset protection. I have made this comment many times previously on this blog. Debtor’s who don’t understand this principal can get themselves into serious trouble during the post-judgment discovery process when the judgment creditor examines the debtor and inspects the debtor’s financial documents in their attempt to find non-exempt assets. Since there should be nothing to hide, answer the debtor’s questions and don’t intentionally obstruct the creditor’s discovery process. In other words, “don’t play games.” Evading the creditor’s questions and providing incomplete documents makes it look like you are hiding assets even if you really have no reason to hide assets.
I have seen several debtors get themselves into trouble with a judge because the judge felt the debtor was evading a creditor’s discovery of assets. If a judge believes you are not fully and truthfully responding to asset discovery you will lose credibility.(judge won’t like you). In the worst cases, a judge can hold a non-cooperative debtor in contempt- I”ve seen it happen.
If a judge forms a bad opinion about your truthfulness and lack of good faith in the judicial process you will be at a significant disadvantage when your attorneys appears in court to defend your asset protection planning. I have had several clients who were forced to make large debt settlements because their creditors seemed to have convinced the judge they were hiding assets only because the debtor fought and resisted reasonable post-judgment discovery.
Don’t dig your legal hole deeper than is already is. If you have a good asset protection plan in place then it is in your advantage to be open and cooperative in your responses to creditor questions. Trust the plan.