A.2.2. The Court and U.S. Trustee Substantial Abuse Determination in Chapter 7.
Under Section 707(b), the Court or an United States Trustee (not a creditor) can move to dismiss the case if the debtor’s debts are primarily consumer debts and the petition is a substantial abuse of Chapter 7.Primarily consumer debt has been defined as more than 50% of the total debt.In re Stewart, 175 F.3d796 (10th Cir.1999).
Determining if substantial abuse exists under the circumstances include evaluating factors such as: (1)sudden illness, calamity, disability, or unemployment; (2) cash advances for consumer purchases in excess of the ability to pay; (3) excessive family budget; (4) accurate reflection of the debtor’s true financial status in the debtor’s schedules and statement of income and expenses; (5) the debtor’s good faith; (6) if the debtor enjoys a stable source of future income; (7) if the debtor is elligible for a chapter 13; (8) if state remedies exist to ease the financial troubles; (9) the degree of relief available through private negotiation; and (10) if the debtor’s expenses are able to be reduced without depriving him of necessities.In re Stewart, 175 F.3d 796 (10th Cir. 1999). |