Fifth Amendment and Bankruptcy

The Bankruptcy Code’s policy requires a full disclosure of an individual’s finances. The debtor agrees to lay out their financial history to the court, the trustee, and their creditors in exchange for the discharge of debt. What happens when a debtor has engaged in unlawful behavior in the past that may be unveiled in the bankruptcy schedules? Does the debtor have any protection, or must the debtor choose between incrimination or not filing bankruptcy?  

Fortunately for debtors, there may be a way to file bankruptcy and still be afforded the protection of the Fifth Amendment. The Fifth Amendment protects criminal defendants from having to testify if they may incriminate themselves though the testimony and applies to bankruptcy proceedings when they touch on issues that could be considered criminal. 

The Fifth Amendment and Bankruptcy- An Example

A simple example is the submission of false tax returns, such as where a debtor failed to disclose income on their tax returns (a federal crime under I.R.C 7201). As part of the bankruptcy proceedings, the debtor must provide a copy of their tax returns to the trustee and the court. The debtor is also required to attend and testify at a meeting of creditors where the trustee generally asks if the tax returns are true and correct copies of the debtors return. This example shows a situation where the full disclosure requirements of the Bankruptcy Code may be in direct conflict with the debtors right to remain silent.  

To invoke the Fifth Amendment privilege, the debtor must invoke the privilege to each question asked by the trustee or creditor that might incriminate them. The debtor must also determine whether their prior actions have waived the privilege. For example, if a debtor has listed a debt in their schedules, the debtor has likely waived any claim or privilege with respect to that debt.  

When a debtor claims the privilege, courts may draw a negative inference about the party invoking the 5th. The debtor may also not be discharged of all their obligations or be denied plan confirmation because they are not meeting the basic requirements of the Bankruptcy Code (I.e full cooperation and disclosure). In some situations, a debtor may be held in contempt of court if the debtor disobeys a court order concerning their privilege. If the trustee is unable to properly administer the case after invoking the 5th, the debtor’s bankruptcy case may be dismissed.  The debtor has no right to avoid testifying in bankruptcy, but may plead the 5th on a question by question basis.

Bankruptcy, the Fifth Amendment, and Criminal Convictions

In some cases a debtor may file a bankruptcy and have been previously convicted of a crime or plead to a crime.  If the questions are about a crime for which the debtor has already served a sentence or plead to then the debtor cannot avoid questions about the crime by pleading the 5th.  This may come up where there are debts that are listed for restitution or actions that were part of a criminal charge.  If the criminal charge has been resolved the debtor has no right to plead the 5th since there is no risk of incriminating yourself.

If there is a risk then the debtor would be well advised to discuss this with their attorney long before you get to the point of filing a case or appearing in court.  Your attorney can advise you if it will be necessary to plead the 5th and in some cases may want to hire other counsel with expertise in criminal law to examine the case.  This might come up if a creditor is accusing the debtor of criminal wrongdoing and attempting to have a debt exempted from discharge in the case.  If there is the potential of a criminal charge then the debtor might please the 5th during any testimony.  The bankruptcy court might take that into consideration and rule against the debtor in the civil matter, making the debt nondischargeable. 


Debtors submit their financial history to the court to trade for a discharge. If a debtor is hesitant to make a full disclosure of their debts, assets, and financial situation, they should speak with both a bankruptcy attorney and a criminal attorney to weigh the civil and criminal implications of their disclosures.   Remember that pleading the 5th cannot be used against you in a criminal matter but that does not prevent a court from taking into consideration in a civil matter.

If you have additional questions about bankruptcy please feel free to contact our office and one of our attorneys will be happy to sit down with you and go over things.  We have bankruptcy offices in Wichita, Topeka, Lawrence, and Overland Park.

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