U.S. Trustee Budget Cut Proposed

25 Jul U.S. Trustee Budget Cut Proposed

A House Committee has fired a shot across the bow of the government’s bankruptcy enforcer. The problem? Excessive zeal in pursuing anti-consumer provisions of BAPCPA. The target? Every government official’s first love: Their budget.

The committee recommended the Justice Department’s U.S. Trustee Program budget be cut by $34 million (about 15%) from last year and almost $43 million (19%) over the Administration’s proposal. Also it demands that the Program report back to Congress on what it will do to adjust to the new political reality.

The Report says:

The Committee is concerned that excessive resources are being expended on efforts by the United States Trustee Program to dismiss cases for insignificant filing defects (thereby creating added burdens on the court and debtors associated with refilings); on the unnecessary use of U.S. Trustee personnel to participate in creditors’ meetings that are already handled and conducted by private trustees; and on making burdensome requests of debtors to provide documentation that has no material effect on the outcome of bankruptcy cases. Such actions by the U.S. Trustee Program are making the bankruptcy process more costly and therefore less available for those who need it. The Committee directs the U.S. Trustees to immediately examine these problems and report back two months after enactment of this Act on efforts to remedy them as soon as possible.

The Senate’s proposal would allow the U.S. Trustee to be fully funded. So a compromise will have to be made between the bills and the USTP may still get its money. But the House’s dramatic action — to force the government to be more even-handed with consumer debtors — should be a wake-up call. It is the strongest action taken by Congress since the 2006 elections to reduce the frustrating toll that developed and continues, due to BAPCPA.

Consumer advocates can only hope this is the first concrete sign of a rebirth of interest in helping consumers in bankruptcy to rebuild their lives unfettered by unnecessary bureaucracy.

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I have been a bankruptcy attorney since 1989. Our firm represents consumers filing bankruptcy almost exclusively, although I have represented bankruptcy trustees as well as creditors. For 2017-2018 I am also serving on the American Bankruptcy Institute's Commission on Consumer Bankruptcy. If you live in Eastern Missouri, visit our website, send an e-mail or give us a call (314) 781-3400. Our website: STLBankruptcy.com
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