by Adam Mack
In addition to the debt ceiling, financial cliffs, and other political wranglings of 2013, the financial crisis faced by the United States’ economy resulted in budgetary concerns for the federal government. This led to the “trimming of the fat” in many departments and programs. And the Department of Justice was not exempt from these budget shortfalls. The Department of Justice is the controlling federal department over the US Trustee’s program whose mission in part is to administer bankruptcy cases.
Part of the administration of these cases is to monitor chapter 7 and chapter 13 cases for fraud. This is generally done by either randomly selecting cases to audit or choosing cases because of red flags that are discovered in the bankruptcy filer’s petition or schedules. Once the cases for audit are selected, an accounting firm is hired to conduct the audit. The accountant firm’s aim is to discover any “material misstatements” in the bankruptcy filing. However, due to financial constraints, the auditing program was indefinitely suspended about one year ago. Now, as of March 10, 2014, the Wall Street Journal and the US Trustee Program’s website are reporting that these audits will now resume.
So why does this matter to you? Well, if you are considering filing bankruptcy, as we discussed previously, you have an absolute duty to be thorough, transparent, and honest on your bankruptcy filing. That duty does not change now that someone maybe watching, but it does mean that you must be ever vigilant in making sure that the information you are filing with the bankruptcy court is accurate. Filing bankruptcy in Kansas is a complicated process. You should not attempt to do so on your own. An experienced attorney will be able to help you identify information you may have overlooked in completing your bankruptcy paperwork and help you avoid the situation where you are asked to explain a material misstatement in your bankruptcy.
These articles are for general informational use and do not constitute legal advice. Since laws change over time, it’s possible some articles are out of date and for that reason, we make no representation that the articles are fully accurate. For actual, up-to-date legal advice (including a free consultation), please contact us!