According to a report on DowJones.com, the U.S Trustee ("UST"), the division of the Justice Department that monitors all bankruptcy cases, has indefinitely suspended its auditing program due to budgetary constraints. The BAPCPA amendments of 2005 authorized the UST to audit 1 out of every 250 consumer bankruptcy cases filed in this country.
This means several different things. For debtors, it means less oversight, intrusion, and hassles from the UST. It will reduce work and expenses for debtors' attorneys, most of whom work for a flat fee whether they are audited or not. It will also let debtors sleep easier at night knowing that it is more likely that they will get their discharge without having to jump through the hoops of an audit.
For creditors, it might mean that debtors will become more brazen with their petitions. If a debtor knows that there is no risk of an audit, he or she might take chances in filing a case that may not have been filed in the past. Creditors should begin to review debtors' petitions for accuracy more so than ever. There are several different ways that creditors can object to debtors' cases, so sharp-eyed creditors' lawyers should analyze all bankruptcy petitions for truthfulness and accuracy.
Please give me a call if you have any questions about the bankruptcy process, whether you are considering bankruptcy for yourself or if someone who owes you money has recently filed bankruptcy.