help please!!! chap 7 presumed to abuse letter

[lpaxton1971]

I received a letter advising that the trustee has reviewed all materials filed by the debtor and has determined that the debtor's case is presumed to be an abuse under 11 U.S.C. & 707(b)(2). There are no reasons why given on the letter. it is one sentence.

My salary was above the means level in Georgia so this may be the reason..not sure though. Anyway, i am waiting for my attorney to get back with me.

I am surrendering my home and my car..or i was going to do this. my dad bought me a car and I am paying him payments and did not put it in my name for now as to not show an asset..it is a cheap car...and now I get this letter. more worries for me i suppose.

anyway, can anyone shed any light on this letter? i read some of the previous threads so am somewhat familiar. Am I going to have to file a chapter 13? Can my attorney fight this letter at all? I am just ready for the worries to go away..if i have to pay on chapter 13 then fine I just want this thing to end.

[backtoschool]

What was your disposable income in your schedules?

Did you have an unusually large car or house payment?

Did you include student loans in your expenses?

The answers to these questions will help us figure out why you got flagged for presumption of abuse.

[ska]

Sorry to hear you received a presumption of abuse letter. It could just be a minor thing that you attorney can handle. I doubt it is that you are above the means. We were above the means and didn't get presumed abuse. Did you have a positive amount left at from your income and expenses? I think if you are close to the $160ish mark on the means test, the UST may question some of the expense in order to push you into a 13. That is just a guess.

I am sure your attorney will have a good explanation.

Good luck!

[Kingxray]

I've have been through this twice. The first time the UST filed a statement of abuse and then motion to dismiss. We then made an agreement to dismiss our Chapter 7, change some things on the means test and then refiled. We refiled in June and the UST again filed a statement of abuse (in August) but not a motion to dismiss as of yet. Our lawyer feels that if the UST files the motion to dismiss we will fight it. Worse case scenario if we lose is we have 30 days to come up with a Chapter 13 plan. So hang in there. All is not lost yet. Don't panic and good luck.

[killinstinct]

You must have a lot of dispoable income? Or expenses that the TT feels are debateable? More info please about your case.....

[lpaxton1971]

thanks for all the responses

I think I may have figured out what has happened but this is just a guess. i looked over the bankruptcy again and it says that the average monthly payment secured by my home in section 20b on form is $2497.01. I don't know where the attorney got this number from??? my two home loans total about $1600.00. this would take my disposable income to about $500.00 if i am figuring this form correctly..and on the filing the attorney did the disposable income is showing as zero.....but then again I don't know how half of the math is done on this form...I can't manage money so surely can't figure this out.
facts about my case:
my disposable income on the filing form was zero. no student loans.
I owed 108,000 in debt.
I am surrendering my home of 6 years...it has no equity.
I have no assets other than a little furniture and clothing. no savings..no stocks..i am flat broke.

I don't know what the heck is going on with half of this bk filing. I need to read more on this board I suppose as all of you seem very knowledgable so thank you for your responses.
I hope that the presumption of abuse letter is something minor that can be ammended. I have already had to sign two amended things so I know he is trying his best to get the chapter 7 to go thru.

[lpaxton1971]

one other question is how long can this go on? if the ust dismisses my chap 7 i guess we have 30 days to file chap 13?

[killinstinct]

I hate to say this but your attorney sounds like a tool. The TT saw that your figures don't add up and thinks you have a substantial amount of disposable income. Basically, you need to show that you have less than $150 or so in extra income per month. If you are surrendering your house, look at what rent costs in your area. That is what the TT will likely expect you to include as an espense. That plus the fact you are over median earned you extra scruitiny.

Try to justify/ammend your expenses. If you are surrendering your house the TT will likely challenge your attempt to use your current mortgage payment as an expense. The thought process is that you will no longer have this obligation, so you may have 'extra' $$. This is a 'grey' area in the courts right now and is in it's infancy of litigation. Worst case scenario, you end up in a Ch. 13 for 5 years paying your disposable income to the TT.

[Kingxray]

one other question is how long can this go on? if the ust dismisses my chap 7 i guess we have 30 days to file chap 13?

First of all, relax. I know it is hard to but try. Only a statement of presumed abuse has been filed, not a motion to dismiss. It could be for a number of reasons. It could be the UST just needs more time to review your case. Have you had your 341 yet?

Now the UST has 30 days to either file a motion to dismiss or convert, or withdraw their statement of abuse. You are just at the beginning.

If the UST files a motion to dismiss, then you need to act. At that point you will need to decide whether to fight it in court, dismiss your case, or file a chapter 13. If you fight it and lose, the judge will give you 30 days to file a chapter 13. You are not at this point yet.

Make a telephone appointment with your lawyer to make sure he will be available when you call. Your lawyer may or may not know why the statement of abuse has been filed. Remember this is a process and nothing is going to happen overnight. You will also find that your lawyer can be a calming affect, as they will not panic or react urgently to what the UST does. Try to stay calm. As I said all hope is not lost. Your just at the beginning of the process. Keep us posted.

[lpaxton1971]

thanks.. you are right.. I do need to relax. my attorney got back with me today and said that they checked the docket in the court website and it said my trustee was dismissed and my case is not subject to dismissal. I was told that both of these are good and that things are moving along as planned. I was also told that discharge should come within 2 months and that if anything else comes up i will be contacted. I guess that the recent ammendment that was done changed the dismissal. I hoping that all works out well. i also appreciate everyone's response. thank you.

[Kingxray]

thanks.. you are right.. I do need to relax. my attorney got back with me today and said that they checked the docket in the court website and it said my trustee was dismissed and my case is not subject to dismissal. I was told that both of these are good and that things are moving along as planned. I was also told that discharge should come within 2 months and that if anything else comes up i will be contacted. I guess that the recent ammendment that was done changed the dismissal. I hoping that all works out well. i also appreciate everyone's response. thank you.

Sounds like good news. Do you know about Pacer? There is a sticky on how to use it on this forum. Pacer will give you an updated status of your case. If you view a document it is 0.8 cents per page. When you check Pacer what you want to see is "meansno, awaiting discharge". It's a good sign if you see that.

[killinstinct]

Woah??? How the (*&^% do you go from a presumption of abuse filing to 'everything's back on track...should be discharged in two months'???? Something seems to be missing here...did the TT take back the motion?

[laurannm]

I agree with killinstinct, something isn't adding up. It almost sounds like your attorney looked at the wrong case. I would get a Pacer account if you don't have one and verify for yourself what is going on.

[killinstinct]

Yes. I don't mean to be alarmist, I'm the first one to tell people to chill during this process. However, this means they are going to push you into a 13 or file for dismissal. Bottom line. Something doesn't make sense here.

[DebtEnder]

Thing you have to remember here is you have two trustee's. The Bk trustee is only looking for assets and money to disperse to creditors. If at your 341 he could discern no assets to give away to creditors for whatever reasons(you have none, you exempted them, they are secured by other loans etc etc) then he is going to ask the judge to dismiss him as there is nothing else for him to do.

The 2nd, much worse to deal with Trustee, is the US Trustee(aka UST) His job is to find people that should be filing one case instead of another. Those filing chapters 7 that APPEAR to have money left over to fund a chapter 13. In general if you make more then the median level for the state and after IRS guideline living expenses, you can look these up on the web or here on this forum, you have over $160 per month or so leftover the UST will ask the judge to dismiss your case or force you to convert to a chapter 13 plan.

It's a fundamental difference between the two and if your Attorney does not understand that you need to find one that does.

In short it sounds like the UST feels your living expenses are invalid and you have cash left over to fund at least partial repayment of your debts in a chapter 13 plan.