Small Business and bank statements

[Memphisbelle]

I am researching filing chapter 7 Feb 1 2011. I meet the mean test in WA.

My job was cut from 12 months to 10 months two years ago. I lost about 20% of my income. To made up the difference in income, I started a sole proprietor painting co in 2010 and about grossed about 8,000 this year. I painted a bit the year before but without a business license and made a little money I claimed on my taxes.


It seems they generally ask for two years of tax returns (although the WA bankruptsy regulations seem to only require one).

So my questions are around bank statements. I plan on having ready one year (2010) of bank statements but do you think they will ask for two years of bank statement because two years of income includes the money I made painting?

I have good records for this year 2010 but for last year I can't even get my bank statements on-line and will have to order them from my bank. And figuring out what deposits came form painting, checks from my credit card account, money my mom gave me etc. it going to be quite a chore. And matching up to the penny what came from painting and what is included in my tax return will be hard. I claimed most of it but I don't think all of it cause I didn't keep good records. I might be off a few hundred bucks or so. Nothing much to pay tax penalties on etc. if it comes to that.


So, I hope they don't want 2009 bank statements to look for the $4000 I made in 2009 with out a business license. I'll make sure I put it on bankruptcy form but two years of bank statements....ugggg!

What do you think? Thanks for any insight into this.

[msm859]

In nor-cal they did not ask for any bank statements

[help1234]

I am a sole proprietor in Washington also... Only required 6 months of business bank statements, but required 12 months P & L statements.

[Memphisbelle]

THANKS help1234 Whew, now I don't have to order and pay for the statements and check images so I can figure out what deposits are what. I kept good records this year as my small business was legit so no problem there with P/L and 6 months statements.

Any other insight you have filing in WA. How many yrs tax return did you need? Did you fie in Seattle?

Thanks again you've calmed me down a bit cause i was worried about that prior question.

[help1234]

We filed in Pierce County, so Tacoma. Only needed 2 years tax returns.. not sure if they were for the Trustee or the attorney. Our attorney asked for a lot of information that I don't "think" he actually needed for the petition, but take that with a grain of salt. We were one of the foolish/lucky ones that hired the first and only attorney we met with. I tend to be a control freak, but followed his advise completely, even when I didn't agree with it. We had NO problems, even though in retrospect I see where others have had much easier cases than ours and encountered issues.

[tcreegan]

Hi MemphisBelle,

The federal BK rules only require last years tax return, but trustees can request more documentation, and this is highly variable by individual trustee. The average bank statement request seems to be between 0 to 6 months back. Be ready, but don't stress out or pay for documents until you get see what your attorney wants. Be able to verify your income for the last 6 months, since you are under-median you don't need to worry about expenses until you get to schedule J and that is your budget from the BK forward. In your case the place you need lots of documentation is your Mom's money.

Like help1234 said, your attorney will want more info than is probably needed, but that is a good thing...give them all the info you can dredge up, the more they know, the better they can head off problems and defend your case!

Good luck to you, hope you find a good attorney!

Tom in Colo

[Memphisbelle]

Thanks, so to be clear, the money my mom deposited in my account is spent and long gone and will have been deposited within the last year but not last six months when I file. So, the only place I THINK it need to shows up is "other income in 2yrs"

I just wonder how much they will want me to verify where I got it and where I spent it. Why should they care if it was more than 6 months ago what it was spent on? I wonder if I should say it was all a gift for simplicity and just prove I got it from mom more than 6 months ago. I mean it was mom's money and not from a credit card. All my credit cards were closed a year ago.

Has anyone had questions about that other income category and how it was spent and if they wanted to see bank statement to see how you spent it more than 6 months ago? Probably questions for an attorney but curious if anyone had questions about "other income"

[frogger]

I was required to provide 6 months of bank statements and the last 4 years of tax returns. Your mileage may vary.