The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), passed by Congress and signed into law by President Bush on April 20, 2005, brings about a fundamental shift in bankruptcy law designed to heighten the integrity of the system and to increase the accountability of debtors, creditors and their counsel. Congress has given the U.S. Trustee Program (USTP) the critical task of implementing many of the Act's provisions. We are grateful for the confidence shown in the USTP, and we welcome the opportunity to help carry out the new law.

Over the past few years, the USTP's civil and criminal enforcement efforts have strengthened the integrity of the bankruptcy system by providing consumer protection and combating fraud and abuse. BAPCPA further enhances accountability by assuring that:

• credit counseling is provided to consumer debtors to help them analyze their financial situation and decide whether filing bankruptcy is the best course of action.
• debtors and their professionals exercise due diligence in preparing and filing petitions and related pleadings.
• a means test is applied to determine whether consumer debtors have the ability to repay debts.
• instruction in personal financial management is provided to consumer debtors to help them avoid future financial pitfalls.
• small-business chapter 11 debtors undergo heightened scrutiny to assure they are complying with statutory requirements.

BAPCPA gives the USTP new responsibilities in a number of areas, including:

• implementing a means test to determine whether a debtor is eligible for chapter 7 or must file under chapter 13.
• certifying entities to provide the credit counseling an individual must receive before filing bankruptcy.
• certifying entities to provide the financial education an individual must receive before discharging debts.
• supervising random audits and targeted audits to determine whether a chapter 7 or chapter 13 debtor's bankruptcy documents are accurate.
• conducting enhanced oversight in small-business chapter 11 reorganization cases.

Preparing for Implementation

Most provisions of BAPCPA take effect on Oct. 17, 2005. The USTP is well underway with its preparations for assuming new responsibilities on that date.

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Some observers predict that filings will increase significantly during the six-month period before Oct. 17, 2005.

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As the 109th Congress proceeded with §256, the USTP established employee working groups to review previous implementation plans and develop new ones. As I write this article, the groups are hard at work, and they are coordinating implementation efforts with other federal agencies and the courts. In recent weeks, for example, the USTP has met with the Internal Revenue Service, the Bureau of the Census, the Small Business Administration and the federal courts. The USTP is also working with the chapter 7 and 13 trustees to clarify new responsibilities and procedures. In addition, the USTP is scheduling training sessions for USTP personnel that will begin this summer.

Some observers predict that filings will increase significantly during the six-month period before Oct. 17, 2005. Even if this occurs, the USTP will continue policing for civil and criminal fraud and abuse, using existing statutory tools to combat such activity. BAPCPA's new means test bolsters, but does not supplant, the USTP's efforts to prevent abuse.

As implementation proceeds, the USTP will post updated information and/or links at http://www.usdoj.gov/ust on matters such as means testing, pre-filing credit counseling, post-filing debtor education and other administrative developments. As information becomes available, USTP officials will be addressing national, state and local groups on topics that include the USTP's new responsibilities.

Conclusion

The enactment of BAPCPA offers an unparalleled opportunity to enhance the integrity, effectiveness and efficiency of the nation's bankruptcy system by improving bankruptcy processes and procedures. While much hard work lies ahead for all members of the bankruptcy community, the USTP is committed to implementing the new legislative changes as smoothly as possible. We look forward to working with all participants in the bankruptcy community in this endeavor, and we anticipate sharing more news regarding bankruptcy system improvements in the months ahead.