Collection Information Statement
A Collection Information Statement is a legal document that is prepared by the Office of the Superintendent of Bankruptcy (OSB) to record and keep a person’s complete financial information as part of the process of assessing an individual’s ability to pay debts. A good Collection Information Statement will contain, in addition to the name and address of the borrower, their current residence, their employer(s), and the names and amounts of all current debts. The Statement should also contain the date the document was entered into the court’s public records. The purpose of a collection information statement is to provide the courts with accurate information about an individual’s financial situation at the time the bankruptcy became final. To prepare the financial statement, the OSB requires the individual to compile certain information regarding bank statements, personal and auto loans, tax returns, pay stubs, current residence, current employer and Social Security numbers. Once all of this information has been compiled, the lender will review the collection information statement and make a decision as to what type of compromise will be made.
collection information statement indications
If the collection information financial statement indicates that the individual does not owe the funds, the court may order a liquidation of the debt. In the past, some collection agencies actually sent letters to the individuals they were attempting to collect, stating that they owed the money and that if they did not pay they would be held in contempt of court. This method actually worked some times, however, today most debt collectors only use physical possession of the debtor to secure a compromise. Once the individual has agreed to a compromise, they are forced to sign a document stating that they have fully paid the debt. If the collection information statement indicates that the individual does owe the money, the court will require repayment. The OSB will then require the borrower to file an information collection form known as the Certified Financial Reports (CFR). The form is used to prove that the individual is in full compliance with all collection activities. This process is very similar to the collection information statement process, except that the form includes certain information required by the Fair Debt Collection Practices Act (FDCPA).
On a positive note, the use of the certified financial report process is strictly voluntary. Neither the government nor any collection agency ever asks an individual to pay an administrative penalty or to settle for a lower amount than the full amount owed. When collection agencies fail to collect an amount of money that the law requires, the courts will order them to repay the entire deficit. As previously mentioned, collection agencies use forms of the Certified Financial Reports (CFR) to determine the amount of recovery; therefore, they cannot deduct any fees from the debt owed. However, if an agency chooses to use the Certified Financial Reports as a means to collect an uncollectible status, they must abide by certain rules laid out by the United States Congress.
The certified financial information form shows several things about the status of an individual’s outstanding taxes. It will show whether the individual owes the IRS a lump sum, an installment, or a monthly payment plan. It will also show whether the individual’s financial responsibilities exceed the amount specified in the debt limit set forth by the IRS. Lastly, it will indicate whether the individual has filed for bankruptcy, and, if so, the status of their bankruptcy. Each collection information statement must be signed by the individual responsible for the collection, unless the statement is an amendment to a previous tax debt notice.
Collection Information Forms That Many Use: