Charles J. Schneider, P.C.certified consumer bankruptcy specialist
forms for your office visit
call today 734-237-1523
Practice Areas Menu In This Section

How will changes to trustee audits affect personal bankruptcy?

When Detroit residents make the decision to file for personal bankruptcy and submit the necessary documents, the U.S. bankruptcy court assigns a trustee to their case. This individual works between the filers and the court to help oversee bankruptcies. Although the trustee helps see the bankruptcy process through, they aren't acting on behalf of the indebted person.

When lawmakers changed bankruptcy laws in 2005, there was concern that people weren't honest about their bankruptcy filings. Whether or not concerns about fraud were valid at the time, Congress installed rules for auditing bankruptcies through the U.S. Trustee Program. Since then, the program itself has run into financial trouble and has been suspended for an indefinite period.

In light of this news, a number of observers believe this change may actually help consumers looking for swift, effective debt relief. When an audit is ordered, it holds up the bankruptcy process. Furthermore, many audits determine that there are "material misstatements" in the documents provided to the court. Even though it isn't entirely clear what constitutes this problem, it is often seen as another reason why bankruptcy cases are delayed.

Financially distressed consumers often can't wait around for relief, which is exactly why they make the decision to file bankruptcy in the first place. Waiting several weeks for an audit that won't turn up any discrepancies may become more than just an inconvenience.

Although bankruptcy trustees will not designate cases to be audited for the foreseeable future, it's still important to make sure everything is accurate when filing. The bankruptcy code is immensely complex, so it is helpful to consult with an experienced attorney when preparing to pursue debt relief.

Source: The Wall Street Journal, "Bankruptcy Watchdogs Suspend Debtor Audits," Jacqueline Palank, April 1, 2013

  • Our firm has helped Michigan residents through personal bankruptcy. To learn more, please see our bankruptcy page.

No Comments

Leave a comment
Comment Information
  • rating

    Posted by MaryDecember 11, 2015

    "I am overwhelmed by your response to my call, even 10 years after my bankruptcy was discharged. You have more knowledge and expertise than I could have imagined. Because of you, my fears have been put to rest. For that, I'm so very grateful. Thank you many times over. "

  • rating

    Posted by ClientOctober 26, 2010

    "... I was extremely impressed with Charles' understanding of the bankruptcy laws to the extent that I felt certain that my best interests were always at the forefront. "

  • rating

    Posted by MarleneJanuary 8, 2014

    He helped me thru my 1st bankruptcy and now the second. I had no idea what to expect , but they kept me informed and answered all my questions. Mr. Schneider is the most experienced and knowledgeable lawyer I have ever met. If you have to file call this attorney first!

  • Avvo Rating 10.0 superb | Top Attorney Bankruptcy
  • Rated By Super Lawyers Charles J. Schneider | visit | super lawyers 2011-2015
  • Avvo Ratting 10.0 superb Top attorney chapter 7
  • Avvo clients' choice 2014 | chapter 7
  • American board of certification | certified consumer bankruptcy specialist
  • AV lexisNexis Martindale-Hubbell Peer Review Rated for ethical standards and legal ability
email us for a response

Let us evaluate your situation
and identify solutions

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy