The Bankruptcy Code requires more of debtors filing Chapter 7 who have been engaged in business, than it does of those whose income is from employment. If you are operating a business, such as a restaurant or shop, or have done so in the last 2 years, you must answer questions in addition to the normal ones for those who are employed.
Determine Whether You Have Kept Proper Records
1. Checking account Do you have all bank statements for the last 2 years?
2. Invoices Do you have invoices for all expenses
3. Cash Do you have a cash ledger for all cash income and payments?
Did you deposit all cash in your bank account?
4. Taxes Have you filed all personal tax returns?
Have you filed all business tax returns? 940? 941? federal and state
Based on Your Records, Determine Whether You Should File Bankruptcy or Not
If you have thrown out your records, or only have checking account records, or have not filed truthful tax returns, or are cheating on income tax, you may be better off staying out of Bankruptcy Court. The U.S. Trustee who examines your case will want to see your business records, and a copy of your bankruptcy goes to the IRS. In addition, you must disclose your income under penalty of perjury, so if you have been getting cash and not reporting it, you probably are better off not signing a bankruptcy petition without disclosing all income.
Additional resources provided by the author
11 U.S. C. 727 (a)(3) A debtor may be denied a discharge for failure to keep books and records. Debtors must produce records which prived creditors with enough information to axcertain the debtor's financial condition and track his financial dealings with substantial completeness and accuracy for a reasonable period past to present. see In re Martin 141 B.R. 986, 995 (Bankr. N.D. Ill 1992)
See 04 B 47448 and 04 B 47450 (Bankr ND IL 2006) Judge Black: In a business case filed by an attorney who only occasionaly did any banrkuptcy work, and submitted no evidence in opposition to the U.S. Trustee's motion to dismiss, the Court held that a business debtor with only checking account records may be denied