Honesty, transparency, and full disclosure are the cornerstones of effective financial restructuring. In a recent episode of Shed the Debt, Joel Kideckel, Vice President at Goldhar & Associates, shared critical insights on why these values matter, both for individuals and business owners seeking financial relief.
Why Honesty Matters
Joel has over 25 years of experience in insolvency, and his perspective is clear: full disclosure is crucial to ensuring a smooth and successful financial resolution process. When debtors hide or misrepresent important details, they risk not only jeopardizing their chances of a fresh start but also facing legal consequences. According to Joel, the Bankruptcy and Insolvency Act mandates accurate and complete financial disclosure. Failing to comply with this requirement can result in penalties, including fines or even imprisonment.
Common Pitfalls in Financial Disclosure
Joel shared some real-world examples where misrepresentation led to disastrous consequences. One of the most common mistakes people make involves undervaluing assets, particularly their homes. For instance, some debtors have been advised by accountants to undervalue their homes to reduce the amount owed during bankruptcy proceedings. However, once this information came to light, these individuals were forced to pay their creditors 100% of what they owed, rather than the expected pennies on the dollar.
This scenario highlights the importance of full transparency. When clients attempt to hide assets or provide false information, they may end up with more debt and a tarnished credit record.
The Dangers of Hidden Assets
Whether it’s a hidden bank account or an undisclosed property, creditors often uncover hidden assets. While debtors may feel that they can conceal certain details, Joel pointed out that creditors are vigilant and will often flag discrepancies. The information debtors provide isn’t just for the trustee; creditors, the government, and the bankruptcy court all review the details closely. Any inconsistencies or omissions can derail the entire process, causing further complications.
Building Trust Through Transparency
Building trust with clients is at the heart of Joel’s approach. He emphasizes the importance of creating an open dialogue with clients, assuring them that their financial details will remain confidential. He also reminds debtors of the legal consequences for providing false information and reassures them that full disclosure ultimately leads to better outcomes.
Best Advice for Financial Restructuring
The key takeaway from Joel’s interview is simple: honesty and transparency are non-negotiable. By disclosing all assets and liabilities upfront, debtors can ensure that their financial restructuring is handled efficiently and legally. Anything less risks prolonging the process and complicating their situation further.
Whether you’re an individual or a business owner facing financial difficulties, the message is clear: full, true, and transparent disclosure is the best way to navigate insolvency successfully.
If you need guidance on how to shed your debt and get a fresh start, Goldhar & Associates is here to help with advice and professional support every step of the way.