Managing Home Paperwork
I am not an attorney, I am a Judgment and Collection Agency Broker. If you need legal advice or a strategy to use, please contact a lawyer.
Remember when the newspapers once told us the Net would make a paperless world? It turns out that although most entities now generate lower amounts of paper, there are now more entities to create paper.
As time goes on, our filing cabinets start to become overstuffed. Yet, we look at the documents kept there much less often.
Thinning out file folders is usually a low priority chore. In most cases, file folders become overfilled. This creates hassles for moves, and when we pass away, those left behind will have to sift though countless of documents to locate that one important document.
It’s a good idea to prune file folders every year, or every couple of years. I think it is best to thin one section of just file cabinet at a time, while enjoying music or watching TV. That makes the sorting task quick and painless.
With periodic documents (e.g., statements), generally you should retain the first and the most recent few. Rather than of keeping ten years of phone bills, store the first one and the most recent three. When you have to to save and itemize all of some paperwork for taxes, then store them in your tax files.
A good scanner helps to reduce your filing cabinet requirement. I hear nothing but good things about the Fujitsu SnapScan, which includes PDF creation software. You can keep your PDFs in folders organized on your computer.
Mac or PC, make sure the PDFs are backed up on at least 2 other drives (e.g., a cloud backup, and a backup to an external drive/disk).
As good as cloud storage is, you need a local backup too. While the motto seems to be “trust the cloud”, computers and networks do go down. Hurricanes, power loss, floods, earthquakes, etc., could make even the best become unavailable or go down.
When you have scanned what you need into PDFs, and you have properly backed up your computer, you can begin tossing out most of your paper records. When anything unfortunate happens where you are, a cloud backup of PDFs might turn out being much safer than one collection of paper-based records.
Undeniably, legal, taxes, medical, and financial records are all much more important than phone bills. There is no need to save temporary or trivial records. Keep some bank statements, throw away all the ATM receipts.
Of course, you must have a shredder for any personal information papers you are throwing out. Make sure you use 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 documents:
Some documents, should be kept for life, or for decades:
Corporate documents, birth certificates, death certificates, CPA audit reports, tax returns, diplomas, licenses, retirement and pension records, important summary legal documents, patents, and trademarks.
Some documents, should be kept for six years:
Accident reports and claims, builder contracts, annual financial statements, important correspondence, important legal documents, property records, purchase records, sales records, and registration applications. Mortgages, deeds, and leases – retain for six years past ownership or rental.
Some records, should be retained for three years:
Improvement receipts, insurance policies, payroll records, medical bills, property records, stock records, and invoices from vendors.
Other types of documents depend on the length that you keep or own assets:
Credit card receipts and bills (keep until they appear on the next statement), pay stubs (keep until you receive your W2), sales receipts (keep as long as you own something), auto records (keep them for 2 years after the vehicle is sold), warranties and instructions (keep as long as you own things).
Because I am a judgment broker, this is my opinion about document retention in a judgment enforcement or debt collection business, or if you enforce your own judgments. Just like personal records, you do not need to save everything.
My opinion is that in all cases, you can shred everything in a judgment case file 5 years after the judgment is satisfied, is worthless because of bankruptcy, or is returned to the original judgment creditor.
Almost every judgment enforcer use either a calculator with a ledger book, a spreadsheet, a database, or a judgment or finance program; to track payments, costs, and earned interest.
When one uses a system to track everything, you do not need to keep every document for 5years. If you prepared 4 court-stamped memorandum of costs over time, you only need to store one copy of the latest one, that summarizes all the previous credits and costs.
Once a writ has expired, you only have to retain 1 copy of it. You only have to retain one original court-endorsed copy of abstracts of judgment, assignments of judgment, and satisfactions of judgment.