Is One Legally Obligated to Give Financial Information to a Creditor for a Debt?

When a person borrows money from a lender, he has a legal obligation to pay it back according to the terms agreed to in the loan. If the borrower fails to do so, the creditor can seek repayment through various means. However, even while the debtor owes money, he enjoys a number of legal protections, including the right to keep much of his financial information private.

Loan Application

When an individual applies for a loan, the lender can request as much financial information as necessary to decide whether to approve the application. While the prospective borrower has no legal obligation to provide this information, the lender has, in virtually all cases, no legal obligation to approve the loan, either. After the two parties finalize the loan, the lender has no right to request additional information.

Collection Actions

To recover a debt, a creditor can file a lawsuit against the debtor who owes him money. Prior to this, the creditor can request the debtor to pay, but he can take few serious steps to recover short of seizing any collateral. However, after the court has issued a legal judgment against the debtor, the creditor can take additional actions, some of which may involve financial disclosure.

Legal Judgment

A debtor has no obligation to give a creditor any information unless a judge orders it. Often, after issuing a judgment, the judge will order that the debtor provide a full account of his assets. If the judge orders garnishment of the debtor's income or seizure of his bank account, the debtor has a legal obligation to cooperate. If he fails to do so, the court may hold him in contempt

Considerations

Courts have only limited power to examine a person's assets. Generally, a court can only ask to view accounts and records germane to the legal proceedings. If a creditor makes a motion to look at records the debtor does not consider relevant, he can object to the motion, usually with the help of an attorney. The judge hearing the case will then rule whether it benefits the court to see these records.