One in 1000 bankruptcy cases are randomly selected by the U.S. Trustee for audit. When that happens, the debtor is sent a letter requesting copies of the following documents:
- Payment advices [paystubs] from an employer covering the six calendar months preceding the date of filing for the debtor and the debtor’s spouse.
- Federal income tax returns, with all attachments, for the two tax years prior to the date of filing.
- Financial account statements for the six calendar months preceding the date of filing and for the month of filing for every financial account in which debtor had an interest; and documentation explaining the source of every deposit or credit, and the purpose of every check, withdrawal or debit.
- A divorce decree, property settlement orders going back three years and pending child support orders, if such documents exist.
The audits are supposed to find material misstatements in the bankruptcy paperwork. [Read more…]
