What if an Audit of My Chapter 13 Case Finds a Material Misstatement?

03 Nov What if an Audit of My Chapter 13 Case Finds a Material Misstatement?

If your Chapter 13 case has been selected for an audit and the auditor finds a material misstatement, the following enforcement options are available to the United States Trustee’s Office:

1)      Motion to dismiss for cause pursuant to section 1307(c)

2)      Objection to confirmation pursuant to section 1325(a)(1),(3),(4), or (7).

3)      Information sent to the Chapter 13 Trustee pursuant to section 1325(b).

4)      Requiring a modification pursuant to section 1329(a)

5)      Revocation of a confirmed plan for fraud pursuant to section 1330(a).

6)      Requiring that schedules be amended

7)      Action taken against debtor’s attorney

Chapter 13 debtors whose cases are found to have a material misstatement often have more ability to achieve a positive result than do Chapter 7 debtors because the United States Trustee’s Office will frequently allow you to amend your plan to correct the problem.  A typical amended plan offers to pay more to the trustee over the life of the plan and increases the percentage paid to unsecured creditors.

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Peter Orville is a bankruptcy lawyer in Binghamton, located in the Southern Tier of New York. He is a member and New York co-chair of the National Association of Consumer Bankruptcy Attorneys.
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