Do you ever feel like this (lol moment)?

[tobee43]

Oops. It is those debtors again? My apologies to pizza for the confusion. I only saw "lavish" and "UST" and somehow went to defend the UST. There are certainly cases where the debtor leads a "lavish" lifestyle, including celebrities, and they still get to file and receive a discharge in a Chapter 7 bankruptcy.

LOL!!!!!!! too funny jb

[tobee43]

i say don't believe everything you read. i think there are many variables that set off a state or UST. first, they are not reviewed by them, usually by someone else who brings it to the trustees attention and then it goes from there. however, once you get them a bone they bite onto one of the ends and do not let go until they must.

i don't think it's arbitrary, i think the petition are more or less reviewed as they come in and then if something pops well there you go! falling into the abyss.

[justbroke]

This would mean that only the typical red flags (over-median, bizarre expenses, etc.) would drive the scrutiny, at least for the time being. I found it interesting that only 1/4th of the target was being achieved.

These are two different things. The "automatic" audit is the one mandated by Congress. That is the 0.5% target (1 in 250), which are selected for scrutiny "regardless of income" upon filing.

I think some debtors confuse the "audit" with the UST's "review". When I write that a UST is "interested" in a case, that is to say that it is being reviewed. Every case that is over-the-median is reviewed by the Office of the United State's Trustee (often not by the actual regional UST themselves). The extent to which the UST's interest is peaked, is determined by factors, which some call "red" flags. Those red flags could include excessive income above the median, expensive homes, expensive vehicles, large amount of unsecured debt (> $100K), multiple filings, etc. The UST has their own set of triggers for which cases get more scrutiny.

No, as for the automatic "audit", that's a very invasive process. The company assigned to audit a particular case will look for material differences between the debtor's actual circumstances and the petition (paperwork). In one article that I read, almost 50% of those petitions audited were found to have "material" differences. I don't think there was fraud, but there may have been bad numbers used. Even with those differences, I have not read about an alarming rate of actual fraud upon the bankruptcy court.