Presumption of abuse

[onacliff]

Just handed the UST over 500 pages of documentation at noonto the UST and by 3pm my Pacer account noted:

As required by 11 U.S.C. Sec. 704(b)(1)(A), the United States Trustee has reviewed the materials filed by the debtor(s). Having considered these materials in reference to the criteria set forth in 11 U.S.C. Sec. 707(b)(2)(A), and, pursuant to 11 U.S.C. Sec. 704(b)(2), the United States Trustee has determined that1) the debtor's(s') case should be presumed to be an abuse under section 707(b); and (2) the product of the debtor's current monthly income, multiplied by 12, is not less than the requirements specified in section 704(b)(2)(A) or (B). As required by 11 U.S.C. Sec. 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 section 707(b) or file a statement setting forth the reasons the 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. Sec. 707(b)(2)(B). Filed by United States Trustee - ORL7.

So, does this mean it is over? They will make us do a 13 or dismiss-- there is NO way they looked over all that documentation in time to enter this... I am so upset I do not know what to do.

[southernbelle]

Sounds like they might force you guys into a Chapter 13.

[Tromploi]

So sorry to hear this, looks like a 13 is likely.

[OhioFiler]

Debtor(s) may rebut the presumption of abuse only if special circumstances can be demonstrated as set forth in 11 U.S.C. Sec. 707(b)(2)(B).

Sounds like you have a chance. I'd be all over my attorney today or first thing in the morning.

[onacliff]

anybody have experience with being presumed abuse and still being discharged a 7??? Please.....

[DebtStinks]

Yikes... do you have any idea what the UST might have not accepted? Were there any direct questions regarding income or a particular deduction? What did your DMI look like? Seems odd that it only took the UST 3 hours to rule on it unless they were just looking for one item they wanted to reject.

[pcn]

Were you over your state's avaerage income level?

[onacliff]

yes- we are over the income and discharging lots of debt.

[laurannm]

If I recall correctly your 341 was on the 12 or 13th, somewhere in there? Since the UST has 10 days from your 341 to file a presumption of abuse, he/she probably hasn't even read over the docs you sent them yet, and may have simply filed the presumption to cover themselves just in case.

All hope is not lost...it's quite possible that once they review your documentation, they could withdraw their presumption of abuse. It has happened to several people on these boards. Have you had a chance to talk to your attorney?

In any event, don't give up!! Just keep providing whatever documentation they ask for and things will turn out ok in the end.

[JRScott]

As laura says don't give up hope

If you filed with a lawyer contact them and see if there is any further documentation needed and describe what you provided. (I hope you had copies of it).

If you filed pro se you should call the trustees office and discuss that you noticed the filing and had sent the 500 pages he requested, ask what more is required in documentation. He might as laura said just filing it in case he needs it later.

I know some folks have beat these, I think Help! was one of them.

[jessegirl]

I am in the same boat!! You guys know if you have following my soga.... We finally got the trustee the paperwork, BUT not all of it, cause we couldn't produce it. After he ha the paperwork is when we sent us a supeona to a 2004 ruling deposition. You should still have hope and DO NOT go down without a fight!!! If you have an attorney please have him call the UST office and ask what the UST plans are. Do that right away. It is a fight to prove that you CANNOT fund a 13. I was asked about that at my depo and I made it clear that we are not able to fund a 13....

Goodluck.

[Help!]

I had a feeling that would be the case based on your earlier posts. First, keep in mind that as horrible as "presumption of abuse" sounds, it really translates to "the UST believes you have the ability to repay at least a portion of your debt". Second, the filing of this statement is not the end of your Ch. 7 case.

As you mentioned, there were some errors in your petition regarding your income and expenses. The UST will now sift through the documentation and either agree with your calculations or will create his/her own calculations. The UST has 30 days from the date the statement was officially filed with the court to do one of three things: (1) file a motion to dismiss or convert to 13, (2) file a declination which allows your case to proceed (this was my outcome) or (3) file a statement of no presumed abuse. Additionally, the UST can be granted an extension to give them more time to make a decision (Jessegirl's current situation).

If you have time to read through older posts, there are a few of us who have made it through the UST presumed abuse statement to discharge - Kimba251, rfasset, dragonnfly... I know there are others but I can't remember now.

It isn't over until the UST files their decision (and even then there are actions you can take if you disagree with their decision), so if you can maintain contact with the UST through your attorney there is no reason to give up. Your attorney should follow up with the UST attorney when they've had a chance to go through all of your paperwork and find out where you stand.

Even though it may feel like you're being accused of being dishonest or as though you've done something wrong, you can maintain your sanity by understanding that you are at a certain point in a flow chart posted on the bulletin board above someone's desk. The UST does everything according to procedure, and reading up on the subject will at least give you an idea of what may happen next.

Case law varies from district to district, but you can at least get a sense of some of the UST maneuvering by looking at cases like these:

https://www.nysd.uscourts.gov/courtweb/pdf/B05TXSC/06-04272.PDF

There's a good 707(b) flow chart here:

classes.lls.edu/spring2007/bank-weinberg/documents/means-test.ppt

PM me if you don't have PowerPoint and I'll send it to you as an attachment.

Hang in there!

[Kingxray]

Onacliff, We are in the same boat and the UST filed a motion to dismiss or convert. I believe that was done to beat the deadline. Our lawyer then had a telephone hearing and we are not redoing our numbers. Lawyer says after that we have to decide if we are going to fight and convert. He will do either and says he has successfully fought 707. I still have hope but am trying to accept the fact that we may be pushed into a 13. I just hope they make payments we can manage. Not much fight left in me.

I agree that the trustee did not look at your documentation and just filed to beat the deadline as I believe they did with us. When the motion to dismiss was filed that explained in detail the issues the UST had causing the presumption of abuse. That is what we are trying to fix right now by redoing our numbers. Good luck to you and keep us posted.

[catleg]

It's not over. It just means they performed step 1, which means your income falls into the presumed abuse bucket. Next they have to decide if they agree with the presumption. Finally you can plead special circumstances.

Not sure what the practical import of all this is, but I wouldn't conclude it's over yet. What you saw was a mechanical application of a filter which required little judgement, I believe. Now their discretion comes into play. In other words how good is your story.

[texanboy76]

If I recall correctly your 341 was on the 12 or 13th, somewhere in there? Since the UST has 10 days from your 341 to file a presumption of abuse, he/she probably hasn't even read over the docs you sent them yet, and may have simply filed the presumption to cover themselves just in case.

All hope is not lost...it's quite possible that once they review your documentation, they could withdraw their presumption of abuse. It has happened to several people on these boards. Have you had a chance to talk to your attorney?

In any event, don't give up!! Just keep providing whatever documentation they ask for and things will turn out ok in the end.

I have a friend that just got an Agreed Motion to Extend 4 days before discharge. They are looking for possible abuse. Is this something that is normal??