Question BK audit

[cardman]

It is my understanding that 1 out of 250 BK filings are being audited. Is it true? If so, at which point of the bankruptcy proceedings will a notice for audit be mailed to the filer?

[papie]

That is the approximate odds of getting audited.

They generally audit before the 341 meeting.

If you have nothing to hide, I wouldn't worry about it. They would request all of the items that you should have provided to your attorney anyways....tax returns, check stubs, etc.

If you do have something to hide....I'm sure you'll hear about it.

[cardman]

That is the approximate odds of getting audited.

They generally audit before the 341 meeting.

If you have nothing to hide, I wouldn't worry about it. They would request all of the items that you should have provided to your attorney anyways....tax returns, check stubs, etc.

If you do have something to hide....I'm sure you'll hear about it.

Nothing to hide! Just curious of the timeline (if push-comes-to-shove) and what other documents need to be ready upon request.
Better to be ready than unprepared.

[ValleYum]

Found a good article about Bankruptcy Audit odds here: http://www.*************************...udit-risk-low/

Here are some highlights:

• One in 583 cases out of 1.4 million bankruptcies filed was chosen for audit in fiscal year 2009. Compare that with a little more than one in 100 tax returns audited by the IRS.
  
  
• In FY 2009, about half of the 2,406 bankruptcy audits were randomly-selected audits. The others were exception or targeted audits of cases with income or expenses above statistical norms. The selection criteria is kept secret by the U.S. Trustee.
  
  
• If your case is selected for audit, you should know within 10 days after your petition is filed.
  
  
• Private audit firms are hired to compare the paperwork, called schedules and statements, with tax returns, bank statements, pay stubs and divorce documents. They run the debtor’s name through two computerized databases to search for unreported assets. If a “material misstatement” is found, the auditor offers the debtor the chance to explain or give more information. A Report of Audit is then filed with the bankruptcy court.

[IamOld]

HI VY - your link is starred out...look I've asked Des this and others - my unsecured debt is HIGH - BUT about 70% is Sallie Mae/fed student loan...that's not a "red flag" is it? I mean it isn't dischargable...I'll wear that stone around my neck till the day I die - unless the system changes...

[justbroke]

Student loan debt is not a red flag. They are looking for other (recent) unsecured debt that makes it look like the debtor was spending well out of their means without the intention or capability to repay. The (somewhat) immediate discharge in a Chapter 7 is reserved for needy debtors. In some cases, Trustees frown upon recent and large unsecured debt. If it looks like it was on the "eve of bankruptcy", that would make matters worse.

As for you, IamOld, I see no issues.

[IamOld]

Student loan debt is not a red flag. They are looking for other (recent) unsecured debt that makes it look like the debtor was spending well out of their means without the intention or capability to repay. The (somewhat) immediate discharge in a Chapter 7 is reserved for needy debtors. In some cases, Trustees frown upon recent and large unsecured debt. If it looks like it was on the "eve of bankruptcy", that would make matters worse.

As for you, IamOld, I see no issues.

Thanks! student loans - are indeed "old" - the only thing RELATIVELY recent are...and I confessed to the fundamental stupidity of it (and desperation) were a few payday loans....(less than $600 total owed). Haven't used any credit card for over a year, and for about a few years beforehand they were so maxed out that I paid - then used for gas - paid - used for groceries -paid - used for gas, etc...