What is a Bankruptcy Audit- Minneapolis, Minnesota
Bankruptcy audits can happen randomly or for a specific reason regarding your case. This blog will explore what an audit is and possible reasons there may be an audit.
An audit in bankruptcy is similar to other audits in life. You will be asked to provide detailed documentation regarding specific aspects of your finances. For example, typically you will provide bank statements, transaction history, receipts, and proof/documentation of income and expenses. Audits are conducted by the U. S. Trustee’s office and will typically have a deadline for the documentation to be turned over. Your attorney would help you with the audit process, but ultimately it is your responsibility to provide the documentation requested.
Although these are not the only reason there may be an audit, below are common ways an audit may be triggered.
First, most commonly is either marital adjustments or a presumption of abuse on the means test. The U.S. Trustee’s office will go through your documentation in an audit, to determine if you qualify for a chapter 7 or belong in a chapter 13 instead.
Secondly, chapter 7 to chapter 13 conversions will sometimes trigger an audit, if income was high when the case was filed and less upon case conversion. Again, the audit will be used to determine whether you still belong in a chapter 13 or not.
Finally, if you have various income transactions in your case, an audit may be triggered to prove the validity of your income. For example, the source of funds and future income.
Audits can be random or for any number of reasons, if you receive one, please reach out to your attorney to work on providing the requested documents in a timely manner.
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No matter where you are in Minnesota, if you have any questions about bankruptcy, visit www.lifebacklaw.com to speak with an attorney. You will be glad you did!
