Keep Your Documents

People often ask themselves and others:  How long should I keep certain documents?  Here’s a classic lawyer’s answer:  it depends! 

The answer depends on the purposes for which you are keeping the documents.  The length of time that you will want to keep them for tax purposes may be different than for business purposes. 

Let me tell you a story about keeping documents.

In 2001, I started a lawsuit on behalf of an electricity utility who was owed about $40,000 by a commercial customer.  This customer had a commercial building on the same property on which they lived.  They had a business that they had operated in the building, which had recently shut down.

The issue was:  who was the customer:  the company or the individuals?  If it was the company, I was in trouble, as the company no longer operated and had no assets.  If it was the individuals, we were winners, as they owned a valuable property.

The customer bought the property in 1969.  They incorporated their company in 1974.  Our position was that the customer was personally liable because the account was in their name when the property was bought.  Unless they could prove that they assigned the account to the company in 1974 or at some time prior to the arrears building up, they would lose.

The utility did not have documents going back to 1969.  The owners had no documents either.  Honestly, I don’t think having the documents would have helped them, because I doubt they ever took any steps to have the account assigned to the company. 

In this case, both sides argued that the burden was on the other party to prove its case.  The court accepted our position, which meant that the owners lost, because they could not produce any evidence of an assignment.

So how long do you keep your documents?  In this case, had the documents ever existed, you would have wanted to keep them for over thirty years!

I have another case right now that deals with work done to a house 23 years ago.  The client, amazingly, has the essential documents from that time.  That is very helpful to our case.

I don’t understand people’s obsession with throwing away documents.  My important household documents for the last 10 years (receipts, bills, old chequebooks etc.) take up two or three banker’s boxes.  That’s not too much to store.  Given all the junk that most people have piled in their basements and garages, a few boxes of papers deserves to have some of that space.  It is certainly more valuable to you than that 1972 suitcase that you will never use again.

My advice:  if there was a reason to keep the document in the first place, there is likely a reason to keep the document for a long time.  Think of it this way:  what is the downside of keeping the document (having to store it) versus the potential downside of not having the document (losing a lawsuit)?