Received a Notice of Statement by United States Trustee of Presumed Abuse

[heartheart]

Logged onto PACER for the first time and saw that a Statement of Presumed Abuse by UST was filed last week (9 days after my 341). My monthly income is under the median (I am a homemaker and my husband receives a disability pension) but I had several one-time transactions this summer that pushed the average over the median (the sale of my car, my cashing in my 401k, my husband receiving a distribution from his 401k). In addition, some of my expenses are perhaps unusual (my husband has a gambling problem and spends at least $1000 a month at the casino, which was included in the petition - I am filing by myself). Could this be the reason they have done this? Is there any hope?

I have an attorney but have not heard anything from him yet.

[btbeme]

As many people have posted herein, any time you have a file with any unusual "warts" - transactions, income streams, assets, transfers, etc - these can and will attract the attention of the Trustee (and the UST). The goal before filing is to manage this process - including the timeline - so as few warts as possible remain.

A notice of presumed abuse means that your file will get closely scrutinized. Trust your lawyer to make this as smooth as possible. No use worrying since the process is out of your hands.

[Pizza]

Was the gambling included as an actual EXPENSE (on the schedules), or were they debts attempted to be discharged? A $1000 monthly gambling expense would send off some alarms right away.

[justbroke]

I will only add that the UST only has 10 days to file a Statement of Abuse. It does not mean that the UST will actually file a Motion to Dismiss for Abuse in the next 30 days, but the UST does have 30 days to now file such a Motion to Dismiss. With the money that you used, I might say that the gambling is the biggest issue. Taking a loan from a 401(k) is a one-time event just as the selling a car. You won't know specifically what the UST is really after until they contact your attorney for more information, or actually file the Motion to Dismiss which would have the details.

I'm guessing that your attorney is willing to fight for you since they included those items in the petition... knew those items were in the petition. Only time will tell.

[heartheart]

Was the gambling included as an actual EXPENSE (on the schedules), or were they debts attempted to be discharged? A $1000 monthly gambling expense would send off some alarms right away.

It's an expense (my husband's expense, included with the marital adjustment, I think that's what it's called). It's a legit expense, and I can show the bank statements which have all of the casino withdrawals on them. They did question this at the 341 (as well as my 401k withdrawal - they wanted to know why I had a month with a fairly large beginning balance on my bank statement), but my attorney told me that since it is a legit expense on his part, and one we can more or less prove, it shouldn't be a problem. However, I'm a little concerned that I haven't heard anything from him about this.

I was also wondering since the statement specifically mentioned that my monthly income did not fit the requirements of (...whatever section of the law that is) to pass the means test. But without those one-time expenses, I know that it does. So I'm wondering if the one-time expenses are the problem, or if that's just boilerplate text that's a catch-all for any issues that they have with my case.

[heartheart]

Also, thank you!!

[Pizza]

What was the reaction at the 341, re: the gambling expenses? Clarification may be required from the court, as to why this is a legitimate, ongoing monthly expense, rather than a one-time event; namely:

my husband has a gambling problem and spends at least $1000 a month at the casino

So if someone were spending $1000 each month playing the lottery, could that be considered an allowable expense under certain circumstances? I don't know - it's just sticking out there like a sore thumb when I read it. Care to elaborate on the specifics here?

[heartheart]

What was the reaction at the 341, re: the gambling expenses? Clarification may be required from the court, as to why this is a legitimate, ongoing monthly expense, rather than a one-time event; namely:



So if someone were spending $1000 each month playing the lottery, could that be considered an allowable expense under certain circumstances? I don't know - it's just sticking out there like a sore thumb when I read it. Care to elaborate on the specifics here?

No, it's not an allowable expense for the filer, it's part of the marital adjustment. When you are married but file by yourself, you get to deduct the portion of your household income that is used solely for the expenses of your spouse (i.e. things that benefit him only, like his own debt payments, his child support, his hobbies, his bad habits like smoking or gambling, etc.). Obviously, it can be easy for people to hide money by claiming marital expenses that aren't real, so I imagine that's why the trustee has decided to scrutinize this part of my petition. But the gambling expense I listed is, unfortunately, all too true, and I have the bank statements to show it, so I am hoping that this will satisfy the trustee once they sit down and take a look at my statements (we use our debit cards and online bill pay for everything, so it's pretty easy to see where all of our money goes each month).

I spoke with my attorney last night and this is more or less what he said. He said to sit tight, that it's not uncommon for them to buy themselves time with this filing to take a closer look at my paperwork (which is what you all said!) and that there's a good chance they'll just let the 30 days pass without filing anything. So...another deadline to sweat out now!