I am not a lawyer, I am a Judgment and Collection Agency Broker. If you want a strategy to use or legal advice, you should contact an attorney.
Remember when the media once told us the internet would create a paperless world? It seems that although most entities now generate less paperwork, there are now more entities to generate paperwork.
As time passes, most filing cabinets tend to become overfilled. Yet, we refer to the documents kept there less and less often.
Cleaning up file folders is usually a low priority task. In most cases, file folders become overstuffed. This adds hassles for moves, and when we pass away, those we leave behind will have to sift though hundreds of documents to find that one important document.
It’s a great idea to trim file folders annually, or every couple of years. It makes it easier when you weed out one part of a file cabinet at a time, while listening to music or watching a TV show. That makes the filing task quick and painless.
When it comes to periodic paperwork (e.g., bills), generally one should retain the first and the most recent few. Instead of storing 10 years of phone bills, keep the first one and the last three. If you need to save and itemize all of some documents for taxes, then store the documents in your tax files.
A good scanner reduces your filing cabinet load. I hear nothing but good things about the Fujitsu SnapScan, which includes PDF creation software. You can keep the PDFs in folders organized on your computer.
PC or Mac, be sure you back up the PDFs on at least 2 other drives (e.g., a backup to an external drive/disk, and a cloud backup).
As wonderful as cloud storage is, you need local backups too. While the slogan seems to be “trust the cloud”, networks and computers do fail. Hurricanes, power loss, floods, earthquakes, etc., can make even the best become unavailable or go down.
When you have scanned what you need into PDFs, and your computer is properly backed up, you can begin tossing out many of your paper records. When something unfortunate happens where you are, a cloud backup of PDFs could end up being much safer than a single set of paper-based records.
Undeniably, taxes, legal, medical, and financial paperwork are all a much higher priority than are utility bills. There is no need to save temporary or trivial documents. Keep certain bank statements, toss out all your ATM receipts.
Having a shredder is mandatory for any papers with personal information you are throwing out. Make sure you use a good shredder, that cross-cuts the papers, and that can accept several pieces of paper at once (or shred a credit card or disk).
Here is my opinion on how long to retain records:
Certain records, should be retained for decades, or for life:
Birth certificates, corporate documents, death certificates, CPA audit reports, diplomas, tax returns, retirement and pension records, licenses, important summary legal documents, trademarks, and patents.
Certain records, should be kept for six years:
Accident claims and reports, annual financial statements, builder contracts, important legal documents, important correspondence, purchase records, property records, sales records, and registration applications. Mortgages, deeds, and leases – retain for 6 years past rental or ownership.
Certain documents, should be retained for three years:
Insurance policies, improvement receipts, payroll records, medical bills, stock records, property records, and invoices from vendors.
Other kinds of records depend on how long you keep or own assets:
Bills and credit card receipts (keep until they appear on the next statement), paycheck stubs (keep until you receive your W2), sales receipts (keep as long as you own it), vehicle records (keep them for two years after the vehicle is sold), instruction and warranties (keep as long as you keep things).
As I am a judgment broker, this is my opinion about records retention in a debt collection or judgment enforcement business, or if you recover your own judgments. Just like personal records, you don’t need to save everything.
My opinion is that in all cases, one can shred everything in a judgment case file five years after the judgment gets satisfied, is worthless because of bankruptcy, or is returned to the original judgment creditor.
Almost all judgment enforcers use either a calculator with a ledger book, a database, a spreadsheet, or a finance or judgment program; to track costs, payments, and interest accruals.
If one uses a system to track everything, you do not have to keep every document for fiveyears. If you prepared 4 court-stamped memorandum of costs over time, you only need to store one copy of the most recent one, that summarizes all the previous costs and credits.
Once a writ has expired, you only have to keep 1 copy of it. You only need to retain one original court-endorsed copy of abstracts of judgment, assignments of judgment, and judgment satisfactions.
