OK, I am sick in my stomach....

[Photomom]

our 341 was on the 9th, today we got a letter of "statement of abuse", I think it's because our income is above the means. I have a call in to my attorney but he's out to lunch, I am a nervous wreck, what does this mean? It says the UST has 30 days to file a motion to dismiss or convert or file a statement setting forth the reasons why the UST does not consider such a motion to be appropriate. Says we can rebut if special circumstances can be demonstrated. What does all this mean? Does it happen often?

[SunshineGal]

Hi Photomom,

First things first...take a deep breath and relax. I know, easier said than done, but you can't think clearly if your a nervous wreck.

Next, get out you schedules and review them, especially the means test and schedules I&J....is there an obvious mistake? It's probably something simple that can be cleared up. Do a search on the forum for "Presumption of Abuse" and you'll find a lot of people received them and went out to have a chapter 7 discharged.

Your attorney should be able to tell you what the UST is having a problem with. Hopefully it will be cleared up soon and you'll get that piece of paper saying "Motion to dismiss is not appropriate".

Good luck, hang in there, and please keep us posted.

[Photomom]

Thanks, I did a search AFTER I posted, I was in a tiff. Back to work I go, hopefully get a call from my attorney later.

[tobee43]

Thanks, I did a search AFTER I posted, I was in a tiff. Back to work I go, hopefully get a call from my attorney later.

you will everything seems a bit scary at this point. these atty's and trustee's do this everyday! so us, we are shocked, confused and simply don't understand it all.

this is from a blog http://www.bkforum.com/entry.php?379...umstances-quot it might help with some clarification:


"well you used the term"totality of circumstances"

appeals court adopted "totality of circumstances" test for bankruptcy proceedings to determine if a debtor has engaged in substantial abuse of the process by filing for chapter 7 bankruptcy, when in fact there is sufficient income to repay debts.

you also hear people use presumption of abuse....sounds terrible but it only means the court, or trustee may think you may be able to afford to pay some of your creditors or a payment plan may be the way the court thinks you have to go.

so, at this point...and this is purely speculation, it may be the trustee opinion after having reviewed your situation, feels there are some assets...or maybe believes you can handle a chapter 13....

it was decided in a past decision and affirmed. not an exact quote....but close to the best i can recall at the moment...for a further explanation.

"the court joins other circuits in adopting the "totality of the circumstances" test as the measure of substantial abuse under the bankruptcy code. this is a flexible standard adopted by congress to allow bankruptcy courts to consider the factors involved in each case and to prevent abuse of chapter 7 filings. When there is evidence that the consumer can pay their debts, there is likely to be found substantial abuse."

[Photomom]

I am just confused, on our original paper from the court it said "presumption of abuse does not arise" I thought we were in the clear, Ugh!

[justbroke]

What does all this mean? Does it happen often?

This means that the United States Trustee (UST) believes that you would actually pay your unsecured creditors a substantial amount over a 36-60 month period, if you were in a Chapter 13. This could be for several reasons. The easiest to check, is on Form B22A... your Means Test. If your attorney checked the "Presumption Arises" box on the upper right corner of the form, then your "Means Test" shows you can pay. This could be caused by the 6 month lookback and not a look forward. This would mean that your Schedule I & Schedule J indicate that you can not pay.

Otherwise, the UST thinks that some of your expenses are unnecessary or improper. For the next 30 days, your attorney would review what's on your forms, just as the UST is reviewing these in great detail. The UST may not even file a motion to dismiss.

How often does it happen? Well, some UST offices "automatically" file this presumption when you are over the median... even if you pass the Means Test! (By "pass" I mean that you do not have enough disposable monthly income based on the formula in the Means Test.)

Your attorney will ask the UST what the problem is and will address the UST's questions. The UST will probably ask for more documentation to satisfy the UST's curiosity.

[sillywalks]

Photomom--

I have just gone through this myself. I do think many UST's file the presumption of abuse to garner them more time for filers who are over the median (they have to file it within 10 days). It seems they file it to give them more time to look over your documentation and see IF there is a presumption of abuse. I'm sure not all UST's do this, but it does seem to happen a lot.

In my case, part of the problem was with my lawyer claiming ownership expenses on my two cars, though neither of them have financing. I provided my attorney documentation about my 'special circumstances' -- that can be car repair expenses (for me, $3000 a year for both cars, documented); if there are medical expenses/diagnosis that require more than the 'standard' amount on the means test (for me, prescription meds, chiropracter, etc.); I even submitted documentation of needed dental work and expenses for my pets (several have medical issues). In the end, the UST withdrew the POA and indicated it would not move to dismiss my case. I am now waiting for discharge.

My suggestion would follow what others have said -- look over your means test that was submitted and be sure it is accurate. Gather documentation for any special circumstances (I think you can include expected repairs for your home, cars, dental work, medical expenses, etc.. Your attorney may or may not ask for them, but it is better to have them just in case! Documentation can include quotes for work that needs to be done, records of past expenditures, etc.

Hang in there! I know something of the stress you are feeling, but thankfully there is a pretty good chance you will be okay in the end!

Good luck!

our 341 was on the 9th, today we got a letter of "statement of abuse", I think it's because our income is above the means. I have a call in to my attorney but he's out to lunch, I am a nervous wreck, what does this mean? It says the UST has 30 days to file a motion to dismiss or convert or file a statement setting forth the reasons why the UST does not consider such a motion to be appropriate. Says we can rebut if special circumstances can be demonstrated. What does all this mean? Does it happen often?

[Photomom]

Should I wait until I hear from my attorney? I don't even remember seeing our means test. Could this have anything to do with the debt we are intending to keep? I work for a financial instituion so we will be reaffirming the debt that we have with them, I have to reaffirm in order to keep my job safe. I know it was an issure before our 341 but our attorney said that it was ok by the time we got to the meeting, he had addressed the issue to their satisfaction.

[sillywalks]

Are you on pacer? If you go to pacer, click on your case number, on the next page click search, and click the documents/history section. Click on the number next to the POA document, it should show you the entire document. It might state why the UST filed the POA. You should be able to see your means test as well. Look for the Initial Doc: voluntary petition. That should open up the pdf of your means test, and you can look at the numbers.

If you are not on Pacer yet, all you have to do is sign up. If you don't find any specific info, you'll have to talk with your attorney. However, if you know you have expenses in some areas that are higher than the standard amount allowed, you can go ahead and gather that info in case you need it.

Good luck!