My Bankruptcy Is Being Audited

Save

If you or your attorney receive a notice that your United States Trustee has selected your bankruptcy filing for an audit, you might feel nervous about what may come next, but usually nothing happens. Most bankruptcy audits occur as random, routine selection to make sure debtors are honest. However, if you have hidden assets or lied about your financial situation, the bankruptcy court might throw out your case.

What Do I Do?

If you have a bankruptcy attorney, the trustee assigned to your case notifies your attorney, or you, the debtor, when you have no representation. The bankruptcy trustee requests documents to prove your income, such as pay stubs from your employer, tax returns from the past two years, statements from any financial account in which you have interest, any divorce decree and orders that came with the divorce, such as child support.

Time Frame

The bankruptcy court has 10 days to audit your bankruptcy case after you officially file it. You or your representative must remit any requested documents to an auditor within 21 days of the notice of any audit. Once the audit firm receives your information, it has 21 days to complete its audit. In total, your bankruptcy audit cannot take more than 70 days after you file your case. Most cases take about 59 days from start to finish, according to the Bankruptcy Law Network.

Considerations

A bankruptcy court finds an error in about one in five cases. However, many of the "material misstatements" found in an audit case are not a serious error or are a mistake on the part of the audit firm. For example, the audit firm usually cross-references your listed assets with that in a computer database. The audit firm may accidentally identify another person's property as your own, especially if you have a similar name or Social Security number with someone else.

Tip

The chance of a bankruptcy audit just adds another reason to hire a bankruptcy attorney. A bankruptcy attorney might be able to argue that any material omission, while accurate, is irrelevant to your case. Also, audit reports do not automatically disqualify your case. Your attorney can defend any negative report or interpretation by your trustee.

Related Searches

References

Promoted By Zergnet

Comments

Related Searches

Check It Out

4 Credit Myths That Are Absolutely False

M
Is DIY in your DNA? Become part of our maker community.
Submit Your Work!