Resumption of Random Audits by US Trustee of Consumer Bankruptcy Cases

Resumption of Random Audits of  Chapter 7, Chapter 11, and Chapter 13 Consumer Bankruptcy Cases.

Random Audits of Under the Bankruptcy Code, beginning with the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), the Office of the United States Trustee was required to perform random audits of consumer bankruptcy cases.   Due to budgetary constraints, the Audit Program was suspended in March 2013.

On February 21, 2014, the U.S. Trustee Program (USTP) announced that it will resume designating cases for audit.   See the Announcement here.  The Wall Street Journal has a good overview of the program and the announced (and actual) rates of audit.   Read that article here.

The Bankruptcy Code (28 U.S.C. § 586(f)) allows the USTP to designate certain consumer bankruptcy cases for an independent firms to audit petitions, schedules, and other information in a bankruptcy case.  This applies to both Chapter 7, Chapter 11, and Chapter 13 Consumer Bankruptcy Cases.

Our experience in the Audit process in prior New Jersey Bankruptcy cases will allow us to address any audit if it should arise.   Through experienced counsel and effective preparation of a bankruptcy petition, the audit process, while time-consuming, should not cause most bankruptcy debtors significant concern.   The “designation” of a case for audit is random and not, from the express terms of the Code, a targeted inquiry.   It typically involves a timely and complete process of providing documents and information to the independent auditor.   For the most part, this is the same information that an experienced Bankruptcy Lawyer will have requested and reviewed with his client prior to the filing of the Petition.



. Pursuant to  the USTP contracts with independent accounting firms to perform audits in designated cases.


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Facing overwhelming debt is a daunting prospect. Calls from creditors and threats of repossession or foreclosure can take a toll on families. It may seem impossible to dig out from a hole and regain financial flexibility and freedom. Thankfully, an Edison bankruptcy lawyer wants to help you. Unlike many other law firms that suggest filing for bankruptcy as the sole chance to escape from under debt, we recognize that many alternatives may be available that bring a similar outcome. Even when bankruptcy is the best option, we provide you with all of the information you need to protect your interests. Give Gillman, Bruton & Capone a call today to schedule an appointment and a free case evaluation.

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