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A bankruptcy audit is definitely not something that you want to experience. Most people who find themselves in a position where they need to file bankruptcy are not very familiar with the process.  You may be bombarded with information from a variety of sources.  Some of this information may be correct, but some of it may be misleading.  Your Minnesota bankruptcy attorney is your most reliable source of information concerning Minnesota bankruptcy law.

One of the bankruptcy topics that stirs numerous rumors is the bankruptcy audit.  Here’s information about the most common of these myths.

Myth 1:  Bankruptcy Audits Don’t Catch Most Fraud Attempts

This myth is absolutely false.  Bankruptcy procedures always include a bankruptcy audit to assure that the information you provided is accurate.  This process is used to discourage and detect people trying to commit fraud.  If you deliberately provide false information, you will probably be caught.  If the inaccurate information was provided inadvertently, the bankruptcy process can be impeded.  Trust an expert in Minnesota bankruptcy lawyer to help make your bankruptcy proceed as smoothly as possible.

Myth 2:  Filing Bankruptcy Triggers IRS Audits

There are so many bankruptcies filed each year that it is impossible for the IRS to audit each of those individuals.  A bankruptcy audit and an audit by the IRS are unrelated and the chances that you will be audited by the IRS after filing bankruptcy are no higher than they are for any other person.

Myth 3:  Debtors Must Fill Out Mountains of Paperwork

Yes, there is paperwork that must be filled out when you file bankruptcy, but it is limited.  You will be required to fill out the documents that prove you are qualified to file bankruptcy, but your Minnesota bankruptcy lawyer will help you with it, then take care of submitting it to the proper authorities.

You will need pay stubs and bank statements from the six months prior to filing, any division of property paperwork or divorce decrees obtained in the last three years, and tax returns for the past two years.  If there are any large deposits or withdrawals on the bank statements, you will need to provide explanations of where they came from and where they went.

Myth 4:  Auditors Force You to Give Up Personal Property

This is probably the most common myth regarding bankruptcy audits. This myth promotes the idea that if you have more than one car or multiple televisions, computers or other electronics, you will be forced to give them up.  For the most part, this statement just is not true, particularly if you need those items for work.  It will mainly depend on what type of bankruptcy you are filing and the amount of your assets.

You will experience a bankruptcy audit during the bankruptcy proceedings, but your Minnesota bankruptcy attorney will help make sure your paperwork is done correctly and help you avoid any potential problems.  Most people who rely on an experienced attorney easily proceed through the audit and successfully complete the bankruptcy process.