Article on bk "abuse" based on employment search...

[Hopeless]

...or lack thereof.

I saw this at the King bankruptcymedia.com site and wondered if anyone has heard of this in any other cases.

Curious as to just how the court knew what the debtor's employment search was like, etc.

This is only a small article, so who knows what details are left out, but I still thought it was interesting - first I've heard of an abuse ruling based on this...

RECENT CASES: Feb. 6. 2007

BAPCPA MADE IT EASIER TO WEED OUT BAD FAITH CHAPTER 7 DEBTORS BY CHANGING "SUBSTANTIAL ABUSE" TO "ABUSE"

CHAPTER 7 DEBTOR WHO FAILED TO AGGRESSIVELY SEEK EMPLOYEMENT PREPETITION WOULD HAVE CASE DISMISSED FOR "ABUSE" BASED ON "TOTALITY OF CIRCUMSTANCES" TEST

CASE MAY BE DISMISSED ON "ABUSE" GROUNDS OTHER THAN "PRESUMED ABUSE" BASED ON FAILURE TO PASS THE MEANS TEST

The court observed: " ... this Court concludes that a debtor who lacks the ability to pay because she has not engaged in a broad employment search, does not wish to work outside her chosen field, does not wish to work within her chosen field outside of southeastern Wisconsin, and takes this position at the expense of her creditors, abuses the provisions of Chapter 7 ..."

The court held, "The court concludes that it must look at the debtor's ability to pay her creditors at the time of the hearing on the motion to dismiss." " . . . it must delve further and find out why the debtor does not have the ability to pay. Finally, the Court concludes that if the debtor's inability to pay creditors is self-imposed, it may consider this fact ... in terms of the totality of the circumstances ..."

In re Richie, 353 B.R. 569 (Bkrtcy.E.D.Wis. 2006). Jeffrey A. Reitz, New Berlin, WI, for debtor. Pamela Pepper, Bankruptcy Judge.

[keepmine]

The total case has been posted here a few weeks ago, As I recall, the thing that set the objections in motion was, she was living with her BF who was paying the majority of there living expenses so, the debtor had plenty of disposable income. She was given the opportinity to convert to a Chapter 13.

[DeadManCrawling]

This is an interesting case.

There ARE instances of members here, in this forum, who actually quit working overtime, 2nd jobs, or even their main job to make numbers work out more favorably.

I think the gist of this case must have been the "other factors" gray area.

As angry as I am over some lending practices (and at my foolishness, too), I might be tempted to become someone's "roommate" and go unemployed for long enough to "stick it to the man".

Really, though, that would hurt no one except the filer, in most cases. Why give up a perfectly good career path to save a few grand?

I guess the "totality" clause was put into full effect on the case you cited.

And probably should have been.

After all bk is supposed to be for "honest debtors to get a second chance".

It seems a bit dishonest to claim no income, high debts, and be living entirely off someone else.

Just my (perhaps not well thought out) opinion.

best wishes, as always,

-dmc

[wayne-o]

my attorney advised me to work a little less going up to bankruptcy....I was working around 55 hours a week, but this was not guaranteed. He advised me to drop down to around 40 if possible and we would base my income on this. I was able to go back to working some overtime after filing, but as the overtime was in no way guaranteed, i didnt have to use it in my budget.