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

[goingcrzy]

Wait. Was it dismissed or motion to dismiss? You can still go to court if it is motion to dismiss. Let the judge figure it out. Your lawyer should have a good idea of the local case law in these situations.

[backtoschool]

When I was living in nyc last year and wanted to file bankruptcy, I met the standards for a chapter 7, but my attorney said that because I made over 170k a year that the trustee would throw it out and make me file a chap 13 even though on the schedules I passed all tests.

I ended up not filing either a chapter 7 or a chapter 13 and was going to settle my debts on my own. Then I got laid off and now my income is only unemployment insurance and I filed chapter 7. (I now live in the midwest)

So at least in nyc where I was living last year, the trustees do NOT want to see high income chapter 7 filers.

[hereforinfo]

$80k for 2 cars is "reasonable and necessary?"

[Liore1477]

My lawyer thinks that we stand a chance to convince the judge that these are reasonable and necessary expenses. Are we supposed to get some type of an itemized list showing what is being disallowed?

Happy_ira, my question is - there is a lease allowance of $460 per car that is an IRS standard. Can they disallow these? Our leases are higher than this, but I have no problem going with $460 per car.

As far as music lessons, my non-filing spose pays for them. That was included in the marital adjustment. Can they still disallow that?

[happy_ira]

I had a somewhat similar case (do a search on my name) which the UST got involved due to high income (over $200k). The UST filed a motion on abuse and was objecting on "totality of circumstances". However, my attorney called the USTs office and said "Fine. You can object on *totality* but then you need to LOOK at the totality as to what is causing the need for Ch 7 relief". He argued that the judge (if it went that far), would look at this very totality that the UST was potentially objecting to.

The UST dropped the case. If you are in NY, private msg me and I'll give you the name of my atty.

HOWEVER, the expensive cars and "extra" items like the lessons are not going to help your case. You need to make sure you are still in Ch 7 territory even once these are carved out.

Meanwhile, do a search on my name in whichi I give more details on fighting the UST on exactly this thing.

GOod luck.

[bkmaggster]

What does your lawyer think?

40k in vehicles and music lessons for your children sound discretionary. Can you convert to a 13 instead, or is it too late?

[Liore1477]

My Ch.7 case was dismissed today due to "abuse" AND "totality of circumstances" at the same time. Basically, the UST did not like the fact that there are two $40K vehicles leased in the family and the total gross income is $175K. Notwithstanding the fact that expenses far outweigh the income (hence the reason for filing), UST wrote that certain expenses are unnecessary. Specifically, she questioned parental support (buying them groceries, meds and household items) and child education (music lessons).

My first question is how difficult would it be to convince the judge in the bankruptcy court that these are reasonable and necessary expenses? Is there such a thing as bias against people making more than $100K no matter what their debt level and expense structure are?

UST wrote that even if we rebut the "abuse" provision, they will invoke the "totality of circumstances". My second question is - does this mean that the case is not worth litigating? Thanks!