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In re Richardson (Case No. 07-60057) 03/19/2008

The matter before the Court is the United States Trustee's motion to dismiss this case for abuse under 11 U.S.C. § 707(b).  Section 707(b)(1) provides that a court may dismiss an individual case under Chapter 7 if (1) the debtor’s debts are primarily consumer debts and (2) it would be an abuse of the provisions of chapter 7 of the Bankruptcy Code to grant relief to the debtor.  Section 707(b)(2) provides that abuse is presumed if a debtor's net monthly income exceeds a certain threshold amount as determined by the means test.  Section 707(b)(3)(B) provides that if the presumption in Section 707(b)(2) does not arise or is rebutted, the court must consider the totality of the debtor's financial circumstances in determining whether proceeding in Chapter 7 would be an abuse.  The burden of proof is on the United States Trustee to prove by a preponderance of the evidence that continuance under Chapter 7 would constitute abuse of the Bankruptcy Code.  The Court concluded that the debtor does not have sufficient income to fund a Chapter 13 plan, and no other facts indicative of abuse are present.  Therefore, the Court denied the United States Trustee's motion to dismiss this case for abuse.

Date: 
Wednesday, March 19, 2008
Category: 
Abusive Filings
Burden of Proof
Dismissal
Substantial Abuse
Chapter: 
7