UST Filed Statement Of Presumed Abuse

[Dr.Know]

Well the UST assigned to my case filed this yesterday
I believe this has to do with the amount I pay for my first mortgage that was listed on the means test. A little backround on my case. During my 341 the UST asked me what was the payment
on my mortgage I told them and apparently it was less than what was listed on the means test. I tried to explain that I was in an option arm and since I was in so much debt, I could only pay the minimum payment. The amount listed on the means test was the interest only payment (which I intend to make) once my case was discharged. The trustee quickly cut me off saying I needed to have my attorney argue this for me. Anyone have any experience with this situation? I'm I screwed? Will the UST trustee force me into a Ch13? ARRGGG! this sucks!
Here is what the document states:

The United States Trustee has reviewed all materials filed by the Debtor and has determined that the Debtor's case is
presumed to be an abuse under Section 707(b).
As required by 11 U.S.C. Section 704(b)(2) the United States Trustee shall, not later than 30 days after the date of this
statement's filing, either file a motion to dismiss or convert under 11 U.S.C. Section 707(b) or file a statement setting forth the
reasons United States Trustee does not consider such a motion to be appropriate. Debtor(s) may rebut the presumption of
abuse only if special circumstances can be demonstrated as set forth in 11 U.S.C. Section 707(b)(2)(B).

[getouttadebt]

I got a similar letter too. Difference is my 341 was pretty smooth. Got the Statement of Presumed Abuse filed 10 days after my 341. Mine was based on my income being well over the median. The UST has 30 days to file a motion to dismiss or convert -- if you get this then there will be a hearing date schedule in front of the BK judge.

The UST is trying to throw as many people out of Ch. 7 and into Ch. 13 as possible -- at least this is my opinion. If you have a good case, you can win during the hearing. Are you represented by a lawyer? If not, I recommend you hire one.

There is a chance that after you file your Opposition to the Motion to Dismiss that the UST will fold. If he thinks he will win, then you probably have to go to the hearing. The day before the hearing, the BK judge will issue his tentative ruling.

I don't know your particular issues, but I am fighting to stay in Ch. 7 myself.

Good luck,
getouttadebt

[Dr.Know]

Thanks! I've followed your post to see how yours is going. I do have an attorney. It seems as though the more I read this forum and now having the pacer account, I'm more in tune with whats going on with my case than he is. I actually had to call him this morning to let him know about the document and he asked me to fax it to him! This is all so stressful. I guess I'll just keep fighting until the fighting is done. Good luck with your case.

[MajorMike]

Being in a 13 is NOT the end of the world!!! You'll pay less and at least have a conscience!

[getouttadebt]

Dr. Know, I had to inform my attorney as well. I think these BK attorneys are overloaded with work and they don't always see the new documents posted to PACER immediately. You will also get a copy of that in the mail in a few days.

There are 2 schools of thought on what to do at this point. You could ask your attorney to be proactive and contact the attorney for the UST to find out why he filed the Statement. But, if he is like my attorney, he might tell you to wait until they decide if they are going to move forward with the Motion to Dismiss. If they do, you will need to pay your attorney more money to represent you. My gut is that if your attorney was proactive, he might be able to present documentation to the UST as to why your case should not be presumed abuse. In that case you might never get to point where the UST files the Motion to Dismiss.

Good luck and let us know what happens...

getouttadebt

P.S. MajorMike, you make a good point!

[CindyLou]

Being in a 13 is NOT the end of the world!!! You'll pay less and at least have a conscience!

hmmm..I don't think chapter 7 vs. 13 has anything to do with conscience. It has to do with numbers. It's a business decision, not a moral decision. That's just my opinion.....

[diviaruba]

Being in a 13 is NOT the end of the world!!! You'll pay less and at least have a conscience!

Does that $200 or so you're paying your unsecureds each month give you your good conscience? Or is it the 5 grand you ran up on gift cards before filing? I'm really at a loss to understand your moralizing on this.

[pa308]

Being in a 13 is NOT the end of the world!!! You'll pay less and at least have a conscience!

not sure i understand, can you elaborate?

[MajorMike]

hmmm..I don't think chapter 7 vs. 13 has anything to do with conscience. It has to do with numbers. It's a business decision, not a moral decision. That's just my opinion.....

You're right, Cindy. I should of said, speaking for myself in this instance. I could NOT file a 7, consciously. That's just me. I owe the money, I need to make an effort to pay it. It's not a BAD thing to be in a 13 as it is SOOOO much better then being hounded by collectors and the payment is lower in most cases, no interest, etc.
I love it, and I feel better myself, knowing I am paying some of my debt back that I created.

[momof5]

Being in a 13 is NOT the end of the world!!! You'll pay less and at least have a conscience!

If the ex-employer that decided my husbands position at work making $35,000+ a year was more important and had a conscience then we wouldn't be in this position.

I would love to be able to pay my creditors back unfortunately its absolutely not possible. My conscience is just fine.

[justplaintired]

Being in a 13 is NOT the end of the world!!! You'll pay less and at least have a conscience!

Not exactly sure you meant to offend, but to be honest, you did. We are not filing C7 because we are bad people who don't want to repay our debts. We are people, how like so many others, who's income has not kept up with the economy.

We both work 2 jobs, which is a total of 4 jobs between us. Still things are tight. Consumer credit counseling wanted a payment we could not make. Sure it's our fault for having this debt. And believe me we have tried to figure out a way to pay it back. We just can't. We don't have the means to do so.

We are currently trying to budget and it's tough. Simply things like kids going to the movies isn't easy. I can't even afford flowers for my flower beds for another 2 weeks, that's when I figure I can buy some.

So please understand, if we had anyway to pay this back, if we could hit the lottery, or suddenly come into money, first thing we do is pay all this money back and stop the BK, but that's not going to happen. If suddenly we could come up with some high paying job, we'd make arrangements to pay this back, that isn't going to happen either. Or if let's say our economy improved well maybe then.

So filing C7 seems like all we can do. Our income is way below the median for our state. Suddenly now I am realizing we actually have more expenses, due to higher cost to live then I originally thought, it's no wonder we have so much cc debt.

[danaf]

MajorMike - You are doing a 13 because you have $825 disposable income a month. That's why you couldn't do a 7. It has nothing to do with your conscious - nothing at all. You had no choice. You should stop trying to make yourself feel better by undercutting those of us that have zero disposable income. It isn't very nice. Attitude check - check!

[DivorceRuinedMe]

Being in a 13 is NOT the end of the world!!! You'll pay less and at least have a conscience!

I agree with the previous posters regarding what you have said. You have the disposable income to fund a Chapter 13 - what about those of us that don't? Do we not have consciences because some tragic or unforseen thing happened in our lives that forced us to have no disposable incomes and not be able to pay our debts? Is it our faults that life happened to us. Some people are luckier than others and bad things don't happen to them. But for those of us that it HAS happened to, it's really unfair of you to say we have no consciences because we can't pay our debts. What if all of a sudden you lost that $825 a month disposable income and you could no longer pay your 13 because of unforseen circumstance. Would you then be without a conscience too?

Word of advice - next time think a little harder before you type. At least some of us have compassion.

[Stilltheone]

I agree with pp's, Mike...

We filed Chapter 7 because my dh's salary got cut in half, totaling a 25K loss per year in salary.

If I could afford to pay my creditor's, I would, but I can't.

I look at it this way.....I'm already ruining my credit by filing. At least by filing Chapter 7, I can start fresh instantly and wipe the slate clean. I won't have a "monthly reminder" in the form of my Chapter 13 payment to remind me of my filing.

How wonderful for you that you had the disposable income to make your Ch.13 payments, but, for some of us, we're lucky if we have $50 extra a month.

I ask this to you, Mike....what would you have done if you DIDN'T have any disposable income? What would you have done if your attorney informed you that the only bankruptcy you COULD file was 7? Would you not have filed? Would you have let your creditors come after your home, your wages, your belongings?

I thought that we were on the Chapter 7 board, not the 13, btw...Why is Mike over here?

[rfassett]

Let's place the blame where it squarely belongs - on the creditors and THEIR lack of conscience in granting credit just because we said "pretty please". I have often said that the banker may be your best friend, but the bank is not your friend. Think about it. And I once heard that the write-off in the credit card industry for people that default was somewhat less than 1/10th of 1% of the gross revenue. Most other industries would die to have that small of a write-off for bad debt. (Major retailers most likely have a higher percentage than that just from pilferage and shoplifting.) And then for these same workers of satan to labor so hard on Congress to change the bankruptcy rules back in '05 is simply beyond comprehension. Their just rewards are coming back to them now that bankruptcies are climbing again. The 2005 changes to the bankruptcy code was by far the worst piece of legislation written in US history. You will not see a tear from me when this industry goes completely in the toilet. Yes each individual shares responsibilty for the plight within which they find themselves, but the creditors share a bigger part and should truly be punished for pushing so many people into this level of stress. It used to be that credit was granted on the three "C's" - character, cash flow, and collaterol. For the last several years, character and collaterol have been ignored. Therein lies the problem - and the blame.