Do you think this is abusive???

[California]

Chapter 7.

Debtors have alot of credit card debt.

They pass the means test and are negative on schedule I and J

Here is the problem, they drive around really expensive cars and they want to keep a boat...

Now, the Chapter 7 trustee can say "HEY thats abusive because if you were not paying for all of those cars and the boat you would have money extra each month to pay back some of your creditor's in a chapter 13"

But here is the kicker, even when you take out the expensive cars and boat payment they are still going to be negative on schedule I and J,

So can the US trustee file a complaint for presumption of abuse if debtors have luxury items but even without those luxury items they are still negative?

Can a chapter 7 case be dismissed just for having those items?

[justbroke]

So can the US trustee file a complaint for presumption of abuse if debtors have luxury items but even without those luxury items they are still negative?

They can make a statement on the presumption of abuse, but proving it is another thing.

Can a chapter 7 case be dismissed just for having those items?

Not necessarily. The only way a Trustee can win, if the debtor otherwise passes the means test, is to use the 707(b)(3) dismissal for "bad faith" and/or "totality of circumstances".

I don't see how a person can have all the luxury items and, without them, still be negative disposable income... and want to KEEP the luxury items! It just doesn't make sense. To me, that means they are hiding assets or are otherwise filing in bad faith.

[albacore44]

I say it depends on what you consider luxury. What you claim in you expense budget is dictated by the IRS standards. If your talking about a big house payment, there is case law in California that rules that the UST can not dis-allow a Ch -7 because of a big house payment. as far as the boat, it would depend on the equity. if they choose system 2 they can exempt $20k or so.

[justbroke]

I was going to say something albacore, but I don't even want to know.

[HHM]

Usually, in a situation like this, there is more going on.

[California]

Usually, in a situation like this, there is more going on.

That may be true, its a good thing im not under a duty to investigate,