UST filed a motion to dismiss

[heartheart]

So the UST decided they don't agree with my/my attorney's calculation of my expenses and have filed a motion to dismiss for abuse. They're being nitpicky on a couple things (they don't agree with my having $100 a month in babysitting expenses since I am a stay at home mom - apparently going out with my husband once or twice a month is an excessive luxury - and say that my husband's $50 a month gym membership is as well), but the major sticking point is the marital adjustment. I am filing, my husband is not. My husband has a gambling problem (among other issues, but my marriage is not really the topic here). He spends $1000 (actually more but that's what we put on the petition) a month at the casino and the UST is saying that this is "excessive." Well, yes - he has a problem - but the means test calculation form says:

on Line 17 the total of any income listed in Line 11, Column B that was NOT paid on a regular basis for the household expenses of the debtor or the debtor’s dependents. Specify in the lines below the basis for excluding the Column B income (such as
payment of the spouse’s tax liability or the spouse’s support of persons other than the debtor or the debtor’s
dependents) and the amount of income devoted to each purpose.

And that's exactly what it is. It's money that my husband spends that is not paid on a regular basis for the household expenses of the debtor (me) or my dependents. Whether he should be gambling that much or not is kind of beside the point - he is not filing, I cannot control his actions, and that money is not available to me to fund a Chapter 13 plan. Short of getting a divorce (in which case I'll have zero income, because as I said above, I'm a stay at home mom), I don't see what else I can do about this.

My attorney agrees with me and seems to think case law supports our argument, so we're going to fight it. Has anyone been through this (or can you reference a poster that has whose old posts I can pull up)?



I'm adding that I've found a couple of cases that seem to support our argument:
1.
In re Shahan, 367 B.R. 732 (Bankr. D. Kan. 2007)
The court found $415.00 for the non-filing spouse’s recreation (health club dues, going to movies
with friends), and a $100 monthly loan repayment by the non-filing spouse to her family members
were appropriate deductions from current monthly income.

1.
In re Sharp, 394 B.R. 207 (Bankr. C.D. Ill. 2008)
The non-filing spouse is not required to adjust her expenses to meet the reasonable and necessary
standard of scrutiny that the debtor’s expenses must meet. (See also In re Baldino, 369 B.R. 858
(Bankr. M.D. Pa. 2007)

But neither of these are from my district, so I don't know if it applies. This one is, though (although it pertains to a 13 case):

In re Grubbs, 2007 WL 4418146 (Bankr.E.D.Va.2007) addresses inclusion of the non-filing spouse’s
income for purposes of determining the applicable commitment period in a Chapter 13. The court
concludes that the use of “current monthly income of the debtor and the debtor’s spouse” in
1325(b)(4)(A)(ii) includes the income of the non-filing spouse only to the extent that is contributed
to household expenses of the debtor or a dependent under 101(10A) and (B).

[heartheart]

One other tiny thing - they filed the Statement of Presumed Abuse on 12/10 and the Motion to Dismiss on 1/9. Isn't that more than 30 days? Or are the 30 days not inclusive?

I'm sure they wouldn't make a mistake like that but sigh...on 1/8 I thought I was just about safe. So close!

[LadyInTheRed]

You start counting on 12/11, so the 30th day is 1/9.

I don't remember this issue coming up here before. Let your attorney worry about finding caselaw. He/she has the reasearch tools to find relevant cases.

I'm sorry you have to go through this, but I'm not surprised the trustee objected. I would say he wasn't doing his job if he hadn't. I agree with you that you have no control over what your husband does. What he spends without your consent should be a valid deduction from income. But, it is reasonable for the trustee to want you to convince the judge that that is really the case.

Babysitting expenses to allow you to go out for dinner should arguably be part of entertainment/recreation expenses as should the gym membership. Did you have an expense for entertainment and recreation?

[heartheart]

Hm, I'll have to go back and look. I'm pretty sure there was an entertainment/recreation expense but it was fairly minimal. Does it make a difference which category it's under? The gym membership was included in the marital adjustment as it belongs to him alone. Not sure if that matters either - six of one, half dozen of the other, isn't it? And it seems that they would object to it either way. They appear to believe that either any gym membership is an excessive luxury or that $50 a month is an excessive amount to pay for a gym membership - it's unclear to me which.

I suppose I can see your point about the trustee, but I'm not terribly happy about the extra thousands I'm having to pay my lawyer so the trustee can make a point If I had extra thousands of dollars laying around, I wouldn't be filing for bankruptcy!

[justbroke]

I don't see any reason why the UST can't question the marital adjustment, the $50 gym membership or the childcare expenses for a married couple where one stays at home. In fact, the United States Trustee Program (USTP) will "oppose any amount listed on line 13" (Marital Adjustment). This is in their core package that is given to every UST in the country. The question will be... does the judge agree.

I would leave the gym membership under the marital adjustment where it clearly belongs. Your attorney will probably argue that the non-filing spouse is not REQUIRED to use all of his/her disposable income to fund a Chapter 13. In fact, many cases show that the non-filing spouses expenses should not receive as much scrutiny under the marital adjustment and certainly not for any abuse or totality of circumstances motion from the UST.

Look at In re Baldino, 369 B.R. 858, 862 (Bkrtcy.M.D.Pa. 2007)

I have not found a provision in the Bankruptcy Code which mandates a non-filing spouse to live modestly or to devote his or her income to the repayment of the filing spouse’s debts. If the legislature is unhappy with the effect of the statute, it is free to amend it within the limits of the Constitution.

(emphasis added is mine)

[heartheart]

I don't see any reason why the UST can't question the marital adjustment, the $50 gym membership or the childcare expenses for a married couple where one stays at home. In fact, the United States Trustee Program (USTP) will "oppose any amount listed on line 13" (Marital Adjustment). This is in their core package that is given to every UST in the country. The question will be... does the judge agree.

This is very interesting - I had no idea. So the UST's official position is that the marital adjustment should/does not exist at all?

[justbroke]

This is very interesting - I had no idea. So the UST's official position is that the marital adjustment should/does not exist at all?

No, that's not the indication. The official position is to "challenge" any amount put on line 13 of the means test (period). I believe it just sets a standard for "due diligence" to make sure that the US Trustees are doing their jobs. I suppose the USTP would rather go before the judge and have the judge overrule them on an objection to any amount listed on Line 13.

Perhaps this isn't zeal, but rather the UST is just objecting because they are required to object, as ordered by the United States Trustee Program (USTP) office.

[heartheart]

No, that's not the indication. The official position is to "challenge" any amount put on line 13 of the means test (period). I believe it just sets a standard for "due diligence" to make sure that the US Trustees are doing their jobs. I suppose the USTP would rather go before the judge and have the judge overrule them on an objection to any amount listed on Line 13.

Perhaps this isn't zeal, but rather the UST is just objecting because they are required to object, as ordered by the United States Trustee Program (USTP) office.

Ah, I see. Does it follow then that any case filed by one spouse only that enters an amount for the marital adjustment will be subject to a motion to dismiss?

[justbroke]

Ah, I see. Does it follow then that any case filed by one spouse only that enters an amount for the marital adjustment will be subject to a motion to dismiss?

Will be subject to scrutiny and, in most cases, an objection. There have been cases in Florida as well where the UST has attacked the Marital Adjustment. In one particular case, the UST complained that the debtor claimed the non-debtor's expense for the first and second mortgage... thereby double dipping!

The key is that "personal expenses" of the non-debtor spouse is allowed in the marital adjustment. The only thing the UST should really be able to argue is if that expense, in the marital adjustment, is really for the "household" expenses of the debtor or the debtor's dependents! In other words, you could not deduct the payment for a car that the debtor drives! Nor could you deduct "food" expenses for the household. You could, though, deduct the car payment for the non-debtor from that amount. I would reason that you could also deduct the non-debtor's other "non-household" expenses.

My thoughts that you only need to prove what is actually being "contributed" to the household expenses (or support of co-dependents). Everything else should be listed in the marital adjustment. At least that is my thought on this topic.

[heartheart]

Thanks JB - in that case, I should be OK (I hope?). Gambling and smoking are clearly not expenses for the household (they certainly don't benefit me or my children), so I just hope the judge sees it that way too.