Like most Americans, the word “audit” probably conjures up images of terrible taxes and the IRS breathing down your neck, demanding more money. When you have just taken a huge financial step and filed for your Arizona bankruptcy, the last thing you want is anxiety akin to that of a tax audit—and yet, each year, a percentage of filers will find themselves facing a bankruptcy audit.
Why is my Phoenix Bankruptcy Case Being Audited?
Just like taxes, you may not necessarily be receiving an audit because you did something wrong. The United States Trustee’s Office is required to audit a certain amount of bankruptcies throughout the country, and yours could be just one of the “lucky” chosen few. If something seemed a bit off about your petition, however, you may receive an audit based on that suspicious or questionable point.
What Can I Expect if My Case is Being Audited?
Despite the high stakes of a bankruptcy audit, the process is initially relatively quick and simple. The U.S. Trustee will assign an audit firm to your case, which may request information from you, which you (or your legal representation) are obligated to provide within three weeks of the request being made.
Essentially, the audit firm will review your petition to ensure that your stated income, debt, and assets are accurate, and that no fraudulent transfers or other intentional misstatements were made. This process must take place in three weeks or less, and the firm’s findings will be sent to the bankruptcy court. From there, the bankruptcy court will decide what action to take.
If there are discrepancies between your bankruptcy statement and your actual financial situation, you will have a short amount of time to explain your case. If your argument or evidence is insufficient to explain your misstatements, the bankruptcy court will then decide whether your case will be dismissed or, in very serious cases, sent for criminal investigation.
What You Can Do in the Face of an Audit
If your Arizona bankruptcy case is facing audit by the U.S. Trustee, you need an experienced bankruptcy attorney to ensure that your case has the best possible chance of emerging from the audit successfully. The Phoenix bankruptcy attorneys at Curry, Pearson & Wooten are available to discuss your case and represent you in your audit; call us at 602-258-1000 or toll-free at 888-929-5292 for a consultation with a lawyer today.