Aaarrrggghhh – Paperwork!

If you have started the process of filing bankruptcy, your attorney has likely asked you to produce a large quantity of documents. This can be a daunting task for many because, truth now, many of us are horrible about record keeping. However, if you are in need of a fresh start financially, then you want your bankruptcy to go smoothly. And, you could actually be prevented from receiving a discharge of debt in your Chapter 7 if you failed to keep good records:

11 USC Sect. 727(a)(3) states that a debtor will get a discharge unless “the debtor has concealed, destroyed, mutilated, falsified, or failed to keep or preserve any recorded information, including books, documents, records, and papers, from which the debtor’s financial condition or business transactions might be ascertained, unless such act or failure to act was justified under all of the circumstances of the case;” (emphasis added)

Basically, if you are in financial trouble and looking at the prospect of bankruptcy, keep track of what you are spending things on. One way to help with this is to hold on to receipts, bank statements, pay stubs and other income documents. Trustee’s rarely get down to the level of looking at receipts for debtors, but every once in a while, expenses get challenged and it would be great to have documents handy to answer the challenge.