When Your Bankruptcy Trustee Requests More From You
Anyone declaring Chapter 7 bankruptcy is theoretically handing over their entire financial situation to the bankruptcy court. More specifically, the bankruptcy trustee assigned to your case takes a keen interest in your financial situation from the moment you file until your case is fully discharged. In fact, the scrutiny of your financial situation can go back several months before you even seriously thought about filing, at least in some cases. Complete and accurate financial information is required of filers, and it's not that unusual for filers to be asked to submit more documentation at times. Read on to learn more about complying with these requests.
Document Requests
The same bankruptcy code number responsible for the terms Chapter 7 and Chapter 13 are also used to describe these documentation requests. Known colloquially as 521 requests, these requests usually mean that the trustee is checking up on certain aspects of your bankruptcy paperwork. Once you file, the trustee's office reviews the bundle of paperwork you filed and looks for red flags. This scrutiny is meant to be mostly about obvious mistakes on the paperwork and other issues not caught by the bankruptcy lawyer before filing. When something doesn't add up, a 521 request is created. Some financial issues that trigger 521 requests include:
- Filers owning expensive real estate or other assets.
- Filers with high incomes but without evidence of the expected assets that match the income.
- Filers with recent sales or gifts of expensive assets to others.
Common Documents Requested
Each bankruptcy case is unique, but some very common requests can include:
- Past federal tax returns.
- Recent bank statements or pay stubs.
Your bankruptcy lawyer will be complying with the requests, but you should be sure to provide your lawyer with the needed documents. 521 requests sometimes occur soon after a filing and the creditor's meeting may have to be delayed until the trustee is satisfied.
Uncommon Documents Requested
If your bankruptcy involved high-dollar debts and/or you have high-dollar assets, some of the following might be requested.
- Proof of the value of an asset like real estate, jewelry, art, collectible vehicles, and more. A professional appraisal will be needed to comply with this request.
- Business owners may need to submit profit and loss statements under an accountant's letterhead.
- Divorcing filers may need to submit separation or final divorce paperwork.
To find out more about these requests along with other issues, speak to your bankruptcy lawyer.