US Trustee Eases Up On Random Audit Procedures In Bankruptcy
Here is an announcement I received as a member of the National Association of Consumer Bankruptcy Attorneys regarding the easing of US Trustee audit document requirements in bankruptcy cases:
We’re very pleased to announce that the United States Trustee Program has changed its audit procedures as a result of the testimony of NACBA President Henry Sommer before the Subcommittee on Administrative and Commercial Law of the House Judiciary Committee. Henry’s testimony at http://www.nacba.org/files/main_page/Sommer%20Jud%20Subcmte%20Testimony%2005-01-07.pdf about practices of the United States Trustee Program that make bankruptcy more burdensome and expensive cited, among other things, the onerous document demands made of every debtor subject to an audit:
“The consumer is asked to provide six months worth of income documentation, six months worth of bank statements, and an explanation of each and every deposit and withdrawal from any account over those six months. Few consumers keep such records; many consumers infinancial trouble operate on a cash basis because their credit cardshave been cut off and they must make numerous ATM withdrawals to meet almost all of their expenses. To account for every expense paid with the cash withdrawn is often impossible.”
Last week, the United States Trustee Program decided that this documentation is, in fact, not necessary in every audit, and revised the document request letter sent to each debtor who is audited. Debtors will not be asked to explain withdrawals or to explain deposits under $500. Such information will be sought only if it later proves significant to a particular case. There is a link to the revised letter below. You should be seeing this letter in all future audits. If you continue to receive the letter previously used, please let us know.
It is good to see that our legislative advocacy can have apositive impact on the policies of the United States trustees. Of course, we have many additional issues that we are pursuing with respect to their practices, and we will continue our efforts to reduce the burdens they impose on debtors and their attorneys.http://www.nacba.org/files/Trustee_Audit_Program_Changes.pdf
Barbara
Barbara Andelman, Esq.
Executive Director, NACBA
National Association of Consumer Bankruptcy Attorneysvisit us at: http://www.nacba.org