Grounds for dismissal?

[laurannm]

I was poking around the Web and found an article that talked about a debit card paper trail before filing a Chapter 13 and got me thinking...

We stopped paying our CC's this month, plus got our tax returns back recently (they were quite large). We are essentially take a little from our tax returns each month to help with basic living expenses.

We are on the bubble as far as Ch 7 vs 13, and since we stopped paying CCs we have a little more money than usual in our bank accounts. We have gone out to dinner & drinks I think twice ($90 - $100) each time, also rented a birthday party place for our son w/ cake, etc. ($250), paid $60 for my son to play soccer in the fall, etc.. Obviously we paid using our debit card. Other than that, no major purchases of any kind. Would a Ch 13 trustee look at our statements and try to file a dismissal once they see some of these non-necessary charges, and claim that we filed in bad faith?

[MomIcantFindmy]

I would doubt it. Yes, your debts and your bank account for that matter may be looked at closely. Many people have spent money on things such as dinner out and childrens birthdays prior to filing. While it may be a non-necessity it does steer a long way from abuse/bad faith. If you are filing a Chap 13 it is likely that the trustee would see you as having extra available income that could be put towards your plan and argue to increase your plan payment.

[laurannm]

Thanks

I would think though that as long as everything on our 22C and schedules accurately reflects all of our income (including tax refunds, etc.), would they try to argue and say that we have more disposable income than what are forms show, and thus try to up our payment (because of what they see on the bank statements)?

I am just wondering if it is a good idea to stop with these types of purchases in the event we are forced into a 13, or am I just way over-thinking this?

[MomIcantFindmy]

What has your attorney said?

Yes, some trustee's do argue for increases in plan payments. Personally, I would avoid those types of purchases until you are into your Chap 7 or 13. Just my thinking. You never really know for sure what someone else (trustee) is thinking. They do follow specific rules and laws though and that part is predictable to some extent.

There is proabably nothing wrong with a McDonalds night out at $20 but eating out $90-$100 dinners more than a few times could definatly show you to have extra disposable income to commit to a plan payment.

[laurannm]

When I initially met with our attorney in March she mentioned that we could continue to live, just don't go on any cruises.

She is out of the office today but I was going to contact her tomorrow. You are probably right, stopping the dinners (or keeping them small) is probably best anyways. To be honest, we can't afford to do it for quite some time anyways.

Thanks again

[upsman4767]

I wouldn't be too concerned with going out to eat. With gas being what it is and food going through the roof you'll be doing good to EAT.