Potential bankruptcy filers sometimes ask whether they really have to produce their income taxes and pay stubs when they file, isn’t this ‘nosey’ of the bankruptcy court?
Tax Return and Income
Under U.S. Bankruptcy Code section 521, after the voluntary bankruptcy petition is filed, and before the creditors meeting, the person filing must submit all pay stubs and/or “payment advices or other evidence of payment received within 60 days before the date of filing the petition”. This requirement applies to all income from all employment or self-employment.
Trustee Must Get Copies
The mandate is spelled out in section 521(a)(1)(B)(iv) of the Bankruptcy Code. Under a different subsection, each bankruptcy filer must also submit to the trustee, 7 days before the creditors meeting, a copy of the Federal income tax return required to have been filed for the most recent tax year ending immediately before commencement of the case. This is section 521 (e)(2)(A)(i).
These requirements apply to every U.S. bankruptcy filing, and are spelled out as pointed out above in the U.S. Bankruptcy Code. However, the actual mechanics of compliance with these mandates are often spelled out in local bankruptcy rules applicable to the individual U.S. Bankruptcy Courts in each district. Some trustees accept these materials by fax, while others still like to get the papers in the U.S. Mail. There are also private uploading platforms many trustees encourage attorneys to use in sending the materials.
Do not file bankruptcy if you have not filed taxes in each of the last 4 years, this will cause problems.
Nosey?
Whether it is ‘nosey’ of the bankruptcy court is a separate question. The goal of most consumer bankruptcy filings is to get a discharge of all or most debt. This is a pretty extraordinary remedy, unavailable in many countries. So, the bankruptcy laws impose conditions including those discussed here.
