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Insolvency Proceedings - Debtor Audits Are Back

Insolvency Proceedings - Debtor Audits Are Back
"You did indeed read that accurately. Audits of debits resumed officially on May 12, 2008. Despite the fact that the panel trustee already examines the debtor and the U.S. Trustee already reviews every petition lodged with the Clerk, this is still the case. The new notice from the U.S. Trustee's office, dated May 9, 2008, plainly states that the U.S. Trustee will resume audits of debtors.When delivering 2004 Exam Subpoenas, isn't the U.S. Trustee performing debtor audits? With these 2004 Exam Subpoenas, isn't the U.S. Trustee already seeking tax documentation and proof of income? Of course. In accordance with Section 603(a) of Public Law 109-8, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, these are not technically audits.Personally, I am still searching for the Act's consumer protection provisions. I'm sure I've seen it somewhere, but I don't see how consumers are actually protected. Presumably, the reaffirmation hearings are a form of consumer protection. Or, you could say that the proceedings are simply another burden the debtor must bear in order to convince the court that he or she can afford the automobile. This typically necessitates additional time away from work, but this is the debtor's concern. It will only make timely car payment somewhat more difficult.I would have referred to the Act simply as the Bankruptcy Code and would have titled a section of that Code as Abuse Prevention. Anyway, I apologize for the digression. The suspension of debtor audits was necessitated by budgetary constraints. I assume that everyone associated with bankruptcy, including myself, spends more money than before bankruptcy reform. As for future investigations, they will be restricted to 1 out of every 1000 cases, down from 1 out of every 250 cases previously.Lastly, I cannot recall the number of cases that were dismissed or discharges that were denied due to a debtor's failure to pass the audit. Were these audits merely endeavors to demonstrate the nature and scope of debtor abuse? If so, will auditing one out of one thousand cases have any effect?The truth is that the U.S. Trustee is merely carrying out the requirements of the Act. Instead of blindly adhering to every provision of the Act, I would propose that we make some modifications. Those who lobbied for eight years for the reforms may have thought the laws appeared good on paper. However, appearing good on paper and achieving actual success are two different things. It is acceptable to confess and acknowledge that. Now, an attempt should be made to level out the rough spots and clarify certain ambiguities. Otherwise, we will continue to wade through minutiae while feigning to walk on a beach of soft sand. Why not make a change if the debtor audits yielded little fruit and if the cost of said audits was prohibitive? Send it back to the legislators for correction. If everyone collaborates, it can likely be completed within the next eight years.
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"Insolvency Proceedings - Debtor Audits Are Back" was written by Mary under the Finance / Wealth category. It has been read 166 times and generated 0 comments. The article was created on and updated on 03 June 2023.
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