Question Statement of Insufficient information from US Trustee

[clijohns3998]

Hello-

My wife is currently going through Ch 7. Today, we received a letter from the UST stating "...Statement of Insufficient Information Necessary to Make Presumption of Abuse".

It mentioned something about missing some required means testing documents,, etc.. We followed up with the lawyer and he said all required paperwork was submitted and is just as confused as us on why they sent the notice. He stated that it may be a stall tactic to give them more time.

Does this sound right? Has anyone encountered this before? Is this a legal tactic? Her 341 meeting was on 12/14/2020. We thought we would be close to the halfway mark on this dreadful situation. Thanks in advance for the help.

[justbroke]

Welcome to BKForum. Here's my thinking.

In some cases, the United States Trustee (UST) must file certain notices, presumption of abuse, within 10 days of the 341 Meeting. Some UST offices will file this type of blanket letter to put the debtor on notice that they haven't received (or processed) all the information necessary to make the determination (on abuse). I believe that the UST has 30 days in total to actual file a motion under abuse if they choose to go down that path.

Since your 34 Meeting as 12/14/2020, the UST only has until 1/14/2021 to file under abuse. There is some noise as to whether the 10-day notice has to be 10 days after a "concluded" 341 Meeting or after the first "scheduled" 341 Meeting.

The UST always has the trump card known as the totality of circumstances, which they can use and have 60 days to file a complaint under the totality of circumstances. The totality of circumstances complaint is more difficult to prove (I think) than the general abuse based on the Means Test. So if the UST thinks you don't deserve a discharge under Chapter 7 because you can "afford" to pay the creditors a dividend in a Chapter 13, then they would go for a dismissal (or conversion) under abuse. If the case is more complex, the UST may proceed under the theory of the totality of circumstances.

(Think of totality of circumstances as something like winning the lottery the day after you file. Despite common misconceptions and Internet folklore, the lottery winnings are NOT part of the bankruptcy estate in a Chapter 7. The only tool that the UST could use in such a case is to file a complaint for dismissal under the "totality of circumstances." The circumstances would be that the debtors income and financial condition significantly changed after filing. There are other nuances as well.)