2001 Article by UST on Ch. 7 No Asset Cases

[Help!]

This is an interesting read for anyone who is under UST scrutiny:

http://www.usdoj.gov/ust/eo/public_affairs/articles/docs/nabtalkfall2001.htm

[StartingOver08]

I just read this article you posted and it appears that it was written prior to Oct 2001 based on the following from the article:

Some of the ways we may wish to address the problems are set forth below. These are solely my opinions, and more definitive answers will require a dialogue between panel trustees and United States Trustees. Martha Davis, Acting Director of the Executive Office for United States Trustees, has announced a civil enforcement initiative that will be one of the Program's major priorities as of Oct. 1, 2001.

I think we may be experiencing the result of this article in our BK filings now because this is pre-BAPCA (Oct 2005)!

[Help!]

Yes, it's pretty old. It's interesting to hear a UST's perspective on their role and to get a little insight into how they think (although this is only one UST's perspective).

[StartingOver08]

Yes you are right - its interesting that the entire BK business generates so much income from such a small percentage of participants (the asset cases). And that was pre-2001 - imagine what it is today!

From the article:
In the typical no-asset case the trustee does not always have an obvious economic incentive to litigate objections to discharge or to spend many hours ferreting out assets only to see the debtor convert to chapter 13. Trustees should consider that their primary revenue comes from asset cases. In 2000, the trustees in the 48 states served by United States Trustees received more than 75% of their revenues from asset cases, even though asset cases comprised only about 4% of all chapter 7 cases. Additionally, in recent years the fees for no-asset cases have remained fairly constant, rising from $47.5 million in 1996 to $50.1 million in 2000 while revenues from asset cases increased from $105.3 million to $161.7 million. (3)

These numbers demonstrate that trustees should be seeking greater recovery from asset cases rather than relying upon no-asset fees for future growth. Making debtors honest by objecting to discharge and finding assets where none appear to exist is in the trustee's economic interest. Once compliance is improved, the trustees will be able to administer more assets with less effort.