Ch.7 dismissed due to "abuse" AND "totality of circumstances"

[brokeballer]

It's not being naive. I don't typically judge, but I have much less sympathy for someone with a high income. They aren't experiencing financial difficulty, they simply spent way too much.

Those of us with lower income were just trying to get by, while those with higher income were trying to "keep up with the Jonses"

[justbroke]

JB: I thought that too, but the code is vague.

It's not vague to me. While parts of the code are muddy, that section is pretty clear. Plus, there is a lot of caselaw on the topic to boot. I think most people don't read past the "presumption of abuse" in section (b)(1), but go no further to (b)(3) which clearly starts by stating that encompasses in relation to the entire chapter. I think all that junk in (b)(2) -- which we lovingly call the Means Test -- is what stops people from continuing to read. In the end, the UST generally doesn't pull that Ace, the bad faith and totality of circumstances card, unless they need to. As a matter of fact, many forget to include such in their motion to dismiss, and end up losing.

That's why many USTs now add the words "or, in the alternative, under 707(b)(3)(B) for totality of circumstances" to their Motion to Dismiss. Sneaky.

Either way, pretty much if the UST is involved, most folks know prior to or at the 341 hearing don't you think?

Pretty much the UST will let you know if they are interested in your case, one way or another. Usually by the conclusion of the 341 Meeting (the concluded 341 Meeting of Creditors,not the continued ones), you'll know if the UST has taken an interest in your case.

[Chowder]

.....with more reasonable car payments there would be money left to fund a 13.

uh huh. If I moved to a cheaper house there'd be more money to pay the sweethearts and Citibank, Chase etc...

Fortunately it don't work that way.

[2manybills]

JB: I thought that too, but the code is vague.

Either way, pretty much if the UST is involved, most folks know prior to or at the 341 hearing don't you think?

[goingcrzy]

Is there anything the UST could look at and say if you didn't pay for that you could fund a repayment plan? Such as a high mortgage, high car payment, private school, or anything else that would stick out?

At this point the UST would need to find something "way out there" since he would need to get a judge to take his side on it.

So if you own a boat, the UST may get on your case, but if your expenses are average for your area then you should be ok.

[mike258]

Mike-

are you high income or high debt? That is where the UST may pop up.

The UST showed up at our 341 and drilled us -to the point where the reg trustee was getting annoyed that his "schedule" was going to get thrown off.

I have high debt.

[goingcrzy]

Mike-

are you high income or high debt? That is where the UST may pop up.

The UST showed up at our 341 and drilled us -to the point where the reg trustee was getting annoyed that his "schedule" was going to get thrown off.

[justbroke]

I know many people think that this is just for presumed abuse, but I've seen many cases that all state that it is for totality of circumstances.

That particular part of the code (11 USC 707(b)(1)(b)) is for the presumed abuse. Most don't read further to 707(b)(3) where the "bad faith" and "totality of circumstances" exist. They do not have the 10-day bar. They only need be asserted prior to discharge.

[mike258]

The UST can file a motion for "bad faith" and/or "totality of circumstances" anytime before discharge. The UST can also, for cause, extend the discharge as well. This doesn't just sneak up on you. The UST would have let you known at the 341 Meeting or shortly after, that s/he didn't like something about your petition, exemptions, or expenses. This doesn't just pop up out of nowhere.

The UST sent me a letter a few days after I filed asking for all sorts of stuff (2,000+ pages worth). I dropped everything off at his office a week before my 341 and haven't heard anything since. He didn't even show up at my 341.

That's why I was curious about the when OP got his motion to dismiss. Also to the OP: Did you hear anything from the UST prior to this or did this just come out of nowhere?

[2manybills]

[justbroke]

When did the UST file his motion? Was it on day 59?

I'm just curious because I am under the scrutiny of the UST and I am on currently day 41.

The UST can file a motion for "bad faith" and/or "totality of circumstances" anytime before discharge. The UST can also, for cause, extend the discharge as well. This doesn't just sneak up on you. The UST would have let you known at the 341 Meeting or shortly after, that s/he didn't like something about your petition, exemptions, or expenses. This doesn't just pop up out of nowhere.

[goingcrzy]

When did the UST file his motion? Was it on day 59?

I'm just curious because I am under the scrutiny of the UST and I am on currently day 41.

Ours was at day 58, but she had been pestering us the entire time. If you haven't heard a peep so far, you may be in good shape.

Good luck!

[mike258]

When did the UST file his motion? Was it on day 59?

I'm just curious because I am under the scrutiny of the UST and I am on currently day 41.

[bankruptsee]

I'm jealous of that kind of income!

If my wife and I made that, we'd be millionaires by now!

I understand the whole income:debt argument and standards of living. But isn't this why the bk code was re-written?

Its abuse in my book too. Good luck.

[banca rotta]

The trustee definitely wants to convert the OP's case to a 13. The income is just too much above the median, and any expenses but food, utilities, and shelter are going to come into question to fund a chap 13 plan.

Settling debts often gives you a huge tax bill, because the forgiven amount becomes "income" on a 1099 form. I know this because I was going to settle my debts as an alternative to chap 13 when I was making a high income.

There are ways around this but the OP may not qualify.