As reported by the Wall Street Journal, the United States Trustee Program, a component of the Department of Justice responsible for monitoring both consumer and corporate bankruptcy filings, will resume its practice of conducting audits of consumer bankruptcy cases on March 10, 2014. Citing budgetary constraints, the United States Trustee Program suspended the audit program indefinitely last March.
The audits are a result of Congress's overhaul of the Bankruptcy Code in 2005, which implemented numerous revisions aimed at reducing fraud and abuse of the bankruptcy system. In addition to selecting one out of every 250 cases per federal judicial district for audit, United States trustees may also select any cases that raise red flags because of unusually high income or expense figures.
Interestingly, the United States Trustee Program does not actually perform the audits; rather, United States trustees select the cases and independent accountants conduct the audits.
The audits are a result of Congress's overhaul of the Bankruptcy Code in 2005, which implemented numerous revisions aimed at reducing fraud and abuse of the bankruptcy system. In addition to selecting one out of every 250 cases per federal judicial district for audit, United States trustees may also select any cases that raise red flags because of unusually high income or expense figures.
Interestingly, the United States Trustee Program does not actually perform the audits; rather, United States trustees select the cases and independent accountants conduct the audits.
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