Well, if you've read my other novel... er... post, you know that I finally found an attorney that I like. This guy's been a Trustee and represents debtors, creditors and Trustees. He really seems to know his stuff and he was very patient with me and answered a lot more questions than I thought he would.
I asked him about the section 707(b) stuff that has been a frequent topic here.
A brief overview of the relevent portions of this section:
707(b)(1) - trustee/judge can dismiss or move to convert your chapter 7 if granting you a chapter 7 would be an "abuse" of the chapter 7 code.
707(b)(2)(A) - This discusses what constitutes an abuse... specifically, if you have $100/month or more disposable income.
707(b)(3) - Further discussion of what consitutes an abuse. specifically, If the "100/month" piece in 707(b)(2)(A) doesn't apply to you, they have to decide:
(direct quotes from the code)
(A) whether the debtor filed the petition in bad faith; or
(B) the totality of the circumstances (including whether the debtor seeks to reject a personal services contract and the financial need for such rejection as sought by the debtor) of the debtor's financial situation demonstrates abuse.
Now the REALLY important part here: (direct quote from the code)
707(b)(7) No judge, United States trustee, panel trustee, bankruptcy administrator or other party in interest may bring a motion under paragraph (2), if the current monthly income of the debtor and the debtor's spouse combined, as fo the date of the order for relief when multiplied by 12, is equal to or less than -- (the median income for your state for the size family you have)
OK, now what _I_ read this to mean, specifically section 707(b)(7) is that if you're below the median income, they can't dismiss your case or force you into a chapter 13 just becase you have more than $100/month disposable income.
So, it would seem that if you're below the median income, you get a "free pass" to chapter 7 if that's what you want... irregardless of your disposable income.
The thing that still gets people worried though is that section 707(b)(3)... What exactly does "bad faith" mean? What "totality of the circumstances" would add up to abuse? This is very ambiguous and unclear.
I said these same things to my attorney and he said that I pretty much have it right... no one knows exactly what they're supposed to do. The code DOES look like it says you get a free pass if you are below the median income... but that section 3 has the judges and trustees scratching their heads trying to figure out how to measure it. I mean, if someone is below the median and has $2000/month disposable income... is that an abuse of the system under this code? Section 7 seems to say that it doesn't matter what your disposable income is if you're below the median income... So what do they do?
He said that this is not settled yet and may not be for quite some time. Until then, it's really judge by judge as to how it is applied. He said that any attorney who is willing to try hard enough should be able to get someone who is below the median income a chapter 7... as long as there's not something else that screams "abuse" like fraud or something like that.
I even gave him my $2000/month scenerio and he said that he still wouldn't say that he couldn't get a chapter 7. He also said that many judges and trustees are pretty much following what they're used to (meaning pre 10/17) guidelines... or if you have $100/month, they're going to try to push you to chapter 13.
So, what does all this mean? It means that you REALLY need to stick up for yourself and not let your attorney just roll over and play dead. The minimum you should be able to do if you have a trustee trying to force you to a chapter 13 when you're below the median income, is to force the trustee to come up with a rational explanation of why your situation is an abuse of the chapter 7 code... and his explanation should not have any reference to your disposable income.
I am not an attorney (obviously) and this is my understanding from a 2 hour conversation with MY attorney here in New Jersey... your mileage may vary, talk to your attorney, print out the relevent sections of the code and if they still say you have to go to a 13... ask them to explain to you WHY those sections of the code are not relevant.
You're going to have a lot of attorneys who are going to just want to go the easy route and do what they always did... file a chapter 13 if the disposable income is $100/month or more. Don't let 'em be lazy. make them work for their fee.
Good luck!
I asked him about the section 707(b) stuff that has been a frequent topic here.
A brief overview of the relevent portions of this section:
707(b)(1) - trustee/judge can dismiss or move to convert your chapter 7 if granting you a chapter 7 would be an "abuse" of the chapter 7 code.
707(b)(2)(A) - This discusses what constitutes an abuse... specifically, if you have $100/month or more disposable income.
707(b)(3) - Further discussion of what consitutes an abuse. specifically, If the "100/month" piece in 707(b)(2)(A) doesn't apply to you, they have to decide:
(direct quotes from the code)
(A) whether the debtor filed the petition in bad faith; or
(B) the totality of the circumstances (including whether the debtor seeks to reject a personal services contract and the financial need for such rejection as sought by the debtor) of the debtor's financial situation demonstrates abuse.
Now the REALLY important part here: (direct quote from the code)
707(b)(7) No judge, United States trustee, panel trustee, bankruptcy administrator or other party in interest may bring a motion under paragraph (2), if the current monthly income of the debtor and the debtor's spouse combined, as fo the date of the order for relief when multiplied by 12, is equal to or less than -- (the median income for your state for the size family you have)
OK, now what _I_ read this to mean, specifically section 707(b)(7) is that if you're below the median income, they can't dismiss your case or force you into a chapter 13 just becase you have more than $100/month disposable income.
So, it would seem that if you're below the median income, you get a "free pass" to chapter 7 if that's what you want... irregardless of your disposable income.
The thing that still gets people worried though is that section 707(b)(3)... What exactly does "bad faith" mean? What "totality of the circumstances" would add up to abuse? This is very ambiguous and unclear.
I said these same things to my attorney and he said that I pretty much have it right... no one knows exactly what they're supposed to do. The code DOES look like it says you get a free pass if you are below the median income... but that section 3 has the judges and trustees scratching their heads trying to figure out how to measure it. I mean, if someone is below the median and has $2000/month disposable income... is that an abuse of the system under this code? Section 7 seems to say that it doesn't matter what your disposable income is if you're below the median income... So what do they do?
He said that this is not settled yet and may not be for quite some time. Until then, it's really judge by judge as to how it is applied. He said that any attorney who is willing to try hard enough should be able to get someone who is below the median income a chapter 7... as long as there's not something else that screams "abuse" like fraud or something like that.
I even gave him my $2000/month scenerio and he said that he still wouldn't say that he couldn't get a chapter 7. He also said that many judges and trustees are pretty much following what they're used to (meaning pre 10/17) guidelines... or if you have $100/month, they're going to try to push you to chapter 13.
So, what does all this mean? It means that you REALLY need to stick up for yourself and not let your attorney just roll over and play dead. The minimum you should be able to do if you have a trustee trying to force you to a chapter 13 when you're below the median income, is to force the trustee to come up with a rational explanation of why your situation is an abuse of the chapter 7 code... and his explanation should not have any reference to your disposable income.
I am not an attorney (obviously) and this is my understanding from a 2 hour conversation with MY attorney here in New Jersey... your mileage may vary, talk to your attorney, print out the relevent sections of the code and if they still say you have to go to a 13... ask them to explain to you WHY those sections of the code are not relevant.
You're going to have a lot of attorneys who are going to just want to go the easy route and do what they always did... file a chapter 13 if the disposable income is $100/month or more. Don't let 'em be lazy. make them work for their fee.
Good luck!
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