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Records Retention Options
Filed under ArticlesDec 15I am not an attorney, I am a Judgment and Collection Agency Broker. If you want a strategy to use or legal advice, please contact a lawyer.
Remember when the newspapers used to predict the internet would create everything paperless? It seems that although most entities now generate lower amounts of paper, there are now more entities to create paper.
As time passes, most filing cabinets start to become overfilled. Yet, we refer to the paperwork stored there much less often.
Thinning out file folders is usually a low priority chore. In most cases, file folders become overstuffed. This creates hassles for moves, and when we die, those left behind must sort though hundreds of documents to find that 1 important document.
It is a good idea to trim file folders annually, or every few years. I think it is best to weed out one part of just file cabinet at a time, while enjoying music or watching a TV show. That makes the sorting job quick and painless.
With monthly documents (e.g., statements), generally one should retain the first and the last few. Rather than of keeping ten years of utility bills, store the first one and the most recent three. If you have to to itemize and save all of some documents for taxes, then store them in your tax files.
A quality scanner reduces your filing cabinet requirement. I hear nothing but good things about the Fujitsu SnapScan, which includes PDF creation software. One can keep your PDFs in organized folders on your computer.
PC or Mac, be sure the PDFs are backed up on at least 2 other disks (e.g., a cloud backup, and a backup to an external drive/disk).
As good as cloud storage can be, you must have local backups too. While the motto seems to be “trust the cloud”, networks and computers do fail. Hurricanes, power loss, floods, earthquakes, etc., can make even the best go down or become unavailable.
When you have scanned what you need to PDFs, and you have properly backed up your computer, you could begin tossing out most of your paper documents. When anything unfortunate happens at your location, cloud backups of PDFs could end up being much safer than a single set of paper-based records.
Obviously, legal, taxes, medical, and financial records are all much more important than phone records. There is not any need to save trivial or temporary documents. Keep some bank statements, throw away all your ATM receipts.
Having a shredder is mandatory for any papers with personal information you are discarding. Be sure you have a good shredder, that can accept several pieces of paper at once (or shred a credit card or disk) and cross-cuts the papers.
Here is my opinion on how long to keep records:
Some records, should be kept for life, or for decades:
Birth certificates, corporate documents, CPA audit reports, death certificates, tax returns, diplomas, retirement and pension records, licenses, important summary legal documents, patents, and trademarks.
Certain documents, should be kept for 6 years:
Accident reports and claims, builder contracts, annual financial statements, important legal documents, important correspondence, property records, purchase records, sales records, and registration applications. Mortgages, leases, and deeds – retain for 6 years beyond ownership or rental.
Some documents, should be kept for three years:
Insurance policies, improvement receipts, payroll records, medical bills, property records, stock records, and vendor invoices.
Other kinds of documents depend on the length that you keep or own assets:
Credit card receipts and bills (keep until they show up on the next statement), pay stubs (keep until you receive a W2), sales receipts (keep as long as you own something), auto records (keep them for 2 years after the vehicle is sold), instruction and warranties (keep as long as you own things).
As I am a judgment broker, here is my opinion about document retention in a judgment enforcement or debt collection business, or if you recover your own judgments. Just like personal records, you do not need to save everything.
My opinion is that in every case, one can shred everything in a judgment case file 5 years after the judgment gets satisfied, is worthless because of bankruptcy, or is returned to the original judgment creditor.
Virtually every judgment enforcer use either a calculator with a ledger book, a database, a spreadsheet, or a finance or judgment program; to keep track of payments, costs, and earned interest.
If one uses a system to track everything, you do not need to store every document for 5years. If you prepared four court-stamped memorandum of costs over time, you only have to keep one copy of the latest one, that summarizes the previous credits and costs.
Once a writ has expired, you only need to retain 1 copy of it. You only have to keep 1 original court-endorsed copy of abstracts of judgment, assignments of judgment, and satisfactions of judgment.