What Do I Do If My Bankruptcy Case is Chosen For An Audit?
By Peter Orville, Attorney at Law on Oct 31, 2007 in Bankruptcy Practice and Procedure, Chapter 13 Bankruptcy, Chapter 7 Bankruptcy, General Bankruptcy Information
On October 20, 2006, debtor audits began, pursuant to BAPCPA, the new bankruptcy law. At least one out of every 250 non business Chapter 7 and Chapter 13 bankruptcy cases is randomly selected for audit.
If your case is selected for audit, your lawyer (or you if you have no attorney) will be notified by the audit firm selected to audit your case. The audit firm will indicate the material they will require. Even if you or your attorney have already sent these items to the case trustee, they must also be provided to the audit firm.
The audit firm will generally require that you provide the following materials within 21 days:
Pay stubs for you and your spouse for the six months prior to the month you filed your bankruptcy petition
Bank account statements for six months, with explanations for all deposits over $500
Income tax returns including all schedules and forms for the previous two years
Divorce documents, including property settlement and child support orders
Self employment documents
The audit firm will ask your attorney if they should communicate directly with you, or should limit their communication with your attorney. Your attorney is generally much more capable than you are in protecting your interests, and making sure you successfully complete the audit.
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