Raleigh Bankruptcy

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The Auditor

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (“BAPCPA”) provided for audit of one of every 250 cases filed by individuals under chapter 7 or chapter 13 to verify the completeness and accuracy of the petition, schedules and other information submitted in the bankruptcy process. The Bankruptcy Administrator is responsible for selecting cases for audit. If a case is selected for audit an independent public account firm is selected to review bank statements, tax returns, pay advises, and the bankruptcy petition, schedules and statements and other relevant material.

If there is an error in the paperwork the audit firm may submit a report to the court of the finding of a material misstatement. It is up to the bankruptcy administrator, US attorney general’s office and the bankruptcy court to determine the appropriate action upon a find of material misstatement by the audit firm. Complete disclosure, cooperation and honesty are a requirement to obtain a discharge, however, with current federal budget constraints the number of audits have continued to decline, but will likely increase as funds become available.