anyone fought 707(b)(3) and won?

[elster]

I won an argument with the UST - included mortgage payment in means test but am giving up house 707(b)(2).

Now UST is still claiming Ch7 abuse under 707b3 - which looks at the totality of the debtor's situation. Has anyone ever come up against this with success, or am I stuck in going to Ch13?

I had a mortgage broker charge me fees of up to almost $100k in doing two refi's in 2006 at the peak, and the house is incredibly underwater.

In 707b3, they look at the totality of the debtor's financial situation, I hope this might help me still get a Ch7.

I hate that I was taken advantage of, lost the house, and still would have to spend 5 years in Ch13.

[TEW]

I won an argument with the UST - included mortgage payment in means test but am giving up house 707(b)(2).

Now UST is still claiming Ch7 abuse under 707b3 - which looks at the totality of the debtor's situation. Has anyone ever come up against this with success, or am I stuck in going to Ch13?

I had a mortgage broker charge me fees of up to almost $100k in doing two refi's in 2006 at the peak, and the house is incredibly underwater.

In 707b3, they look at the totality of the debtor's financial situation, I hope this might help me still get a Ch7.

I hate that I was taken advantage of, lost the house, and still would have to spend 5 years in Ch13.

http://www.bkforum.com/showthread.ph...&highlight=707

here is a thread you may want to look at.
also check another member named HELP!! 's posts I believe she won and stayed in a 7

[HHM]

Yeah, the 707(b)(2) issue is largely settled across the nation, you can claim a mortgage payment as an expense even on a home you are surrndering.

The Trustee would need more than simply the surrendered home to prevail on the totality of circumstances issue.

[laurannm]

The Trustee would need more than simply the surrendered home to prevail on the totality of circumstances issue.

Would they though? Lets say the OPs mortgage payment is $1500/month. I understand being allowed to claim this on the means test, but would you still be allowed to claim this on the schedules? I would think that the UST would reduce the housing expense on the schedules to whatever the IRS guidelines dictate (which could be significant depending on t he circumstances), thus potentially increasing the amount of disposable income going forward.

[HHM]

Would they though? Lets say the OPs mortgage payment is $1500/month. I understand being allowed to claim this on the means test, but would you still be allowed to claim this on the schedules? I would think that the UST would reduce the housing expense on the schedules to whatever the IRS guidelines dictate (which could be significant depending on t he circumstances), thus potentially increasing the amount of disposable income going forward.

Keep in mind, I&J is the "snap shot" of your finances "at the time of filing". Thus, you can claim your current housing expense.

It's actually very hard for the trustee to win the Totality of circumstances of argument. If the trustee loses under 707(b), they cannot turn around and use the same fact to argue totality. There needs to be more. The trustee would need to demonstrate actual bad faith on the part of the debtor to prevail under 707(c)

[elster]

The house is still not auctioned yet, I was wanting to forgive the CC debt in the Ch7 as well.

I did not file the petition in bad faith and the fact is these fees are directly what led me to this situation. I will be horrified if I have to be in Ch13 for 5 years after being taken advantage of by the broker....doing two refi's in the same year, and the broker makes 93k in profit off the top...doesn't sound like abuse on my part. I hope that defense stands up at the hearing.

I am worried they will say i can afford to fund a Ch13 plan which keeps me stuck for 5 years, and I still lose my house.

[elster]

This is what I am afraid will happen:

http://jbublick.blogspot.com/2008/02/debtor-passes-means-test-but-dismissed.html

[HHM]

Well, how close are you to the facts in that case.

In that case, there seemed to be more going on, they had a house that they no longer lived in and were claiming an expense, they also had 401K deductions etc. And barring the the mortgage and 401K they could pay 100%.

Granted, you are at risk...(I get the sense you are filing Pro Se, without an attorney, correct?). If so, now may be the time to spend the money on an attorney.

[evilxs]

I am in the situation right now with a house I do not live in that I am claiming as an expense, and is an expense. I also would have the ability to pay in a trustee's eyes without the house expense. My lawyer let me know point blank up front that this will end up going to court. His point of view in our area was that this is something I do stand the potential to lose and may end up in a chapter 13. I have other circumstances for the totality of it, but you need an attorney now. You need someone fighting for you, or you risk 5 years of repayment, this is very possible.

[elster]

I do have an attorney, we just prevailed on 707b2 and now we have to deal with 707b3. I certainly wouldn't be doing this on my own...

I was just curious if anyone's been through this and prevailed. Unfortunately I am not finding much on 707b3 compared to means test/707b2.

[happy_ira]

elster - I have been *extremely quiet* on these boards for the past month as I have been very busy battling my own US Trustee (TEW linked my case in the posting way above here) Please PM where you are located if you want to compare some notes. Some of the others will recognize my name... for better or worse, do we want to be remembered on these boards?

Here's my $0.02 based on fighting my own case with the UST: you must be able to prove and convince the UST (and the assigned Trial Attorney) that your case should not be be presumed abusive under 707(b)(2)/(3). In other words, if you and your attorney believe you've got red flags, that is not *terrible*. Red flags are OK as long as you can justify and explain clearly.

For example, for illustrative purposes, one thing you may notice by reading posts on these boards is that people who are *way* over the mean income, even if they "pass" the Means Test (Form 22A), are just about automatically flagged as presumed abuse. In some cases, there is indeed abuse. But in other cases, even though income is above mean, there are extenuating circumstances that cause it.

In my humble opinion, the USTs, in general, are quite smart. They know if someone is trying to pull a fast one or if there is legitimate need for a Chapter 7. How do they know this? Well, again, it goes back to, in non-legal terms, proving and convincing them of whatever mitigating factors are present in your case.

For instance, although I have an attorney, I took the time to sit down and write a concise and pointed letter to the UST Trial Attorney explaining that while my income was way over means test, there were specific reasons why the Chapter 7 should apply (and I then listed them along with attached documentation). My attorney also followed up with a couple calls to the UST to address what/if there are issues still open.

I would *not* recommend trying to battle the UST on the face of the abuse. Meaning "hey, you are wrong, there is no abuse". While in the end, it does come down to abuse or not, it's just a roundabout way of addressing the UST's issues. Make sense?

Not sure if this helps... every situation is obviously unique. Hang in there. If you file the Chapter 7 petition in good faith, just be honest about the needs/circumstances... I believe you have some compelling facts. The others have already provided input...

To everyone else who has been kindly following my case/inputs: I will be posting an update shortly with, thank G-d, good news.

[HHM]

Also, if its any consolation, judges don't really like the totality of circumstance arguments, they prefer to make rulings on more concrete and certain issues. So in that respect, if your case ends up in front of a judge, the judge will be looking for "obvious" abuse. They tend not to rule in the UST favor if the issue is questionable.

[happy_ira]

Also, if its any consolation, judges don't really like the totality of circumstance arguments, they prefer to make rulings on more concrete and certain issues. So in that respect, if you case ends up in front of a judge, the judge will be looking for "obvious" abuse. They tend not to rule in the UST favor if the issue is questionable.

I need to once again agree with HHM.

Without going into the gory details in this thread, the US Trustee in my case was close to objecting on this exact issue: "totality of circumstances." (In fact, I believe biotechsolution prophesied this in my case WAY WAY back in an earlier thread for me...) However, after I provided the additional documentation combined with a letter from me and then two follow-up calls from my attorney, the US Trustee backed down.

It is important to note that the US Trustee did not back down merely because I was attentive to her issues, but rather because I satisfied the looming question of whether or not my case was abusive.

So, to HHM's point, if my case would have gone before a judge (which, believe me, it came *very* close to happening) the US Trustee's argument was going to be "totality of circumstances". To which my attorney had called the US Trustee Trial Attorney in advance and flat out said (this is an almost verbatim quote): "With all due respect, if you are going to object on the totality of circumstances, then you need to *look* at the TOTALITY of the circumstances. And when you do that, you will see there are mitigating circumstances of X, Y and Z." If any case with such compelling evidence/proof/whatever-you-want-to-call-it shows no abuse, then it seems to become hard for the objection to stand based on a generic "totality" since the Judge will look at the TOTALITY in detail, not just as a big mish-mash.

Am I making sense these days? Boy, I need a vacation... but, well, I don't think I can genuinely afford one on my own until 2025!

[WoodSprite]

elster - I have been *extremely quiet* on these boards for the past month as I have been very busy battling my own US Trustee ... Some of the others will recognize my name... for better or worse, do we want to be remembered on these boards? ...To everyone else who has been kindly following my case/inputs: I will be posting an update shortly with, thank G-d, good news.

Hey, Ira - glad to see you're still kicking! I had a feeling your absence must indicate that you were pouring all your energy into your US Trustee battle, and I've been wondering how it was going, so thanks for the hint! I'll be looking forward to hearing the whole story soon...

[Help!]

http://www.bkforum.com/showthread.ph...&highlight=707

here is a thread you may want to look at.
also check another member named HELP!! 's posts I believe she won and stayed in a 7

What a nightmare... I feel for you. We did manage to get a UST declination, but not for a totality of circumstances objection. Have you considered offering up assets you exempted for liquidation? In our case, we were able to show that the value of our liquidated assets would allow greater repayment to our creditors than a Ch. 13 plan. It was an extreme course of action to take (and it really created a hardship), but it was worth it for us to get out from under our debt and have some hope for the future.

My advice would be this: instead of adopting a defensive posture with the UST as your adversary, attempt to work with them. If they are convinced your discharge would be an abuse, the only way to win is to convince them otherwise. If they object to the totality of your circumstances, change the totality of your circumstances.

The last resort is litigation - having your attorney present a brief to the judge. Not only can this get expensive, but based on what I've seen in this forum and in court most of these slacker BK attorneys are no match for the highly skilled UST attorneys. I recall seeing only one case in which a judge sided with a debtor in an objection to a 707(b)(3) motion to dismiss.