Federal bankruptcy watchdogs are once again patrolling in full force, restarting the consumer debtor audits that a tight budget forced them to suspend last year, the Wall Street Journal reported today. The U.S. Trustee Program announced that it will resume ordering audits of certain consumer debtors on March 10. The program indefinitely suspended the audit program last March due to budgetary constraints. When Congress overhauled the Bankruptcy Code in 2005, it directed bankruptcy watchdogs to ferret out fraud by auditing consumer debtors. U.S. trustees may randomly designate for audit one out of every 250 consumer bankruptcy cases per federal judicial district. The Bankruptcy Abuse Protection and Consumer Protection Act of 2005 also authorized audits of any cases in which debtors posted statistically unusual income or expenditures.
