Statement & Notice of Presumed Abuse

[lbogie]

We just received a "Statement & Notice of Presumed Abuse" letter yesterday. What does this mean? I am freaking out. This BK 7 process (2nd for us : ( in 15 years) is certainly full of hoops. Ok, we started the process in Sept. 2010 but have been sinking for a long time before then. I lost my job of 15 years in Jan. 2010, started a new job March 2010 and lost that job Oct. 8, 2010. In July we lost a family member, my husband's only brother passed away unexpectedly. We have been reeling with all this crap in our lives!!!! Since September, we had several meetings with our attorney. Finally filed Jan. 19. Our 341 was Feb. 22. somewhere in there the UST asked our atty. for our income. He said he sent them immediately. March 4 a "statement of presumed abuse" was filed and we received it Mar. 8. I called our attorney and he said he doesn't know why it was filed. "Unless we are so close to the medium" He insists that he ran the numbers 4 times and we qualified. He also said he doesn't want to call the trustee in fear of "stirring the hive". WTF? This has been so stressful. What does this mean? I am so afraid that we are going to lose our home (to be forced to pay creditors) or be brought up on charges for fraud or that our case will be dismissed. What can we do? I'm trying to keep it together and just WAIT some more. I'm feeling so guilty and responsible for making so many mistakes in our life. I'm even questioning the atty. I'm trying to have Faith and trust in him but nothing seems to be going smoothly. We are financial eff ups! I feel we are at the end of the road. I hope our marriage can survive this. I know that material things do not matter. My husband gets down because he feels like we don't have anything to show for our 27 years of marriage and struggles. We have 3 great grown children, our health and each other but we both feel like failures. I am so sorry, I feel responsible for us having to go through all this. Again, I'm rambling.
My question was can someone please explain what the "Statement & Notice of Presumed Abuse" means? There is no explanation other than "The Debtors' case should be presumed to be an abuse under 11 U.S.C. 707(b) and the product of the Debtors' current monthly income, multiplied by 12 is not less than the requirements specified in 11 U.S.C. 704(b)(2)(A) or (B). I'm fearing the worst. Thanks for listening. LB

[debtprison]

He also said he doesn't want to call the trustee in fear of "stirring the hive". WTF?

That sounds really bad. It honestly sounds as if you might need a new attorney. Could he be hiding something that he did here and could that be the reason why he doesn't tell you? I'd give him another chance and demand that he tells you what is going on. If he doesn't I'd get another attorney and consider contacting the trustee directly.

[csonly]

lbogie - please relax, I know exactly how you are feeling right now. We also had the POA statement filed, we are also in PA. The UST has 30 days to motion for a conversion to chapter 13, dismiss or to file a motion that the POA is inappropriate. Since your attorney said his numbers qualified you for a 7, then I would keep faith. You cannot be forced into a chapter 13, it has to be voluntary. My attorney said the exact same thing about upsetting the apple cart, so we waited and it took the UST the 30th day and he filed that the the POA was inappropriate (and that is exactly what you want to hear). Sometime in that 30 days the UST asked for additional documentation for expenses. A short while after that, the UST contacted our attorney with his "interpretation" of our schedules, meaning income and expenses. For us, the UST claimed that we would actually have over $1000 DMI (disposible monthly income) and could fund a chapter 13. I knew this wasn't possible, so once I got my hands on the UST's calculations of income and expenses, it didn't take long for me to figure out that they had our figures all messed up. I then sent my attorney the "real facts" about our expenses along with more documentation. These errors were both on the part of our attorney and the UST office and on my part because I didn't know enough to go over each figure with a fine tooth comb when we filed. So in the end, they did deem the POA as inappropriate and now we are waiting discharge, which should be any day now. So please, I know how much you are worrying, but just make sure your t's are crossed and your i's are dotted, double check every calculation. Also, if you have any special circumstances where an expense may be over the average for your area, be sure to document that. Keep faith, but wait it out and see what the UST comes back with. This will seem like the longest 30 days ever, but you will get through it, believe me. Please keep us posted. If you seach this forum, you will probably find my frantic post when we received ours as well.

BTW, you are not alone here. We've all been down this road.

[lbogie]

Thank you so much. It is what it is, right? Our Attorney just got back to me and said he understands how stressful it is receiving the notice; however, it is only a notice. He said there are no details included. When/if a petition is filed, we will touch base to discuss. Who would have thought this would be so stressful.

[csonly]

You're so right, it is what it is and this is so much more stressful than I ever thought it would be. I really hope your trustee gives your attorney his calculations before they would file a petition. Our UST even asked our attorney to ask us if we would want to dismiss or convert and to let him know before the 30 day mark, so to me, I knew that the UST was being fair and didn't just slap us with the petition. We are over median, so our attorney told us up front that the UST MAY want more documentation, but he never said one word about a POA and like you, I had no clue what it even was until I got it. I knew the UST had 14 days to do his "look over" but really didn't know it would have the impact that it did, I just was prepared to send him more documentation if he asked for it. Again, if you have a good attorney and he felt confident that his numbers were on target and listed correctly, I think you will be fine. I wish you nothing but the best!!

[Maddie]

Fingers crossed for you. The stress is horrible and can strain all aspects of your life. Hang in there because it will get better. We were over median too and were still able to file Chp 7. I hope this is the case for you too.

[frogger]

Our Attorney just got back to me and said he understands how stressful it is receiving the notice; however, it is only a notice. He said there are no details included. When/if a petition is filed, we will touch base to discuss. Who would have thought this would be so stressful.

Once again, a gentle reminder to all that bankruptcy is not an "event". BK is a process, a process that has a life of its own. A process that has many small events, a lot of paperwork, and the opportunity to start over fresh.

Chill, don't worry unless your attorney tells you to worry. Patience grasshopper.....

[lbogie]

Chill, don't worry unless your attorney tells you to worry. Patience grasshopper.....

Sounds like a good idea. That IS what we paid him for.

[chrisdfw]

Just relax, a statement of presumed abuse sounds bad, but it is not bankruptcy fraud or anything like that.

The trustee wants to examine your case and see if it should be a chapter 13. Even if they find abuse, you can still fight it, but until they actually file a motion there is nothing to fight. If everything is accurate then you will be fine.

[clevelandmom]

Your attorney went over your number 4 times. Trust him. The UST probably looked it over once, may have either miscalculated or had it come really close, and decided to keep it for another look, so they filed the Notice of Presumed Abuse w/in the 10 days they are supposed to. (If the UST doesn't file that within 10 days, it's over, done, they're finished). There is also the "totality of circumstances" to consider, so at the end of the day, once they've taken everything into consideration, you should be fine. Hang in there and grab some wine. The waiting sucks but you WILL make it through this.