Due to severe budgetary constraints, the United States Trustee is no longer designating bankruptcy cases for random audits. Bankruptcy attorneys across both Oregon and Washington who had to cope with the burdensome audit requirements aslong with their clients are now breathing a heavy sigh of relief
Ever since the enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), Debtor’s counsel across both Oregon and Washington had to cope with the prospect that any one case filed in either state might be subject to a random audit. This is so because the BACPA established procedures for independent audit firms to review not only the Schedules filed in a given case but the supporting documents relied on to support the Chapter 7 Bankruptcy filing.
The documentation required by the audit firms were extremely burdensome to both bankruptcy filers and their attorneys. While the audits were random to both the attorney and government, it was often difficult to convince a bankruptcy filer that the audit wasn’t personal or that their attorney hadn’t somehow messes things up. Even worse, the audits themselves were wholly conducted by third party accounting firms that had very little knowledge of the ins and outs of consumer bankruptcy. The paper requirements that they would impose on chapter 7 bankruptcy filers might have been more properly used on corporations. Here’s hoping that the random audits never come back.
If you have any questions about audits or what kind of review is likely to take place after you file Chapter 7 Bankruptcy, please feel free to contact me any time or set an appointment at any one of our bankruptcy law offices in Portland, Salem, Vancouver or Seattle. I will look forward to hearing from you and getting your Chapter 7 Bankruptcy Case filed.