Consumer Filing Requirements
The bankruptcy code requires debtors to file _____ detailing a great mass of information about their financial situation including _____, _____ & ______, and _______.
The bankruptcy code requires debtors to file schedules detailing a great mass of information about their financial situation including creditors, assets & liabilities, and income.
The basic notion of the means test is that if an ________ debtor has sufficient net ______ to pay a significant portion of his or her _______ debts under a Ch. 13 plan, the debtor should not be eligible for Ch 7.
The basic notion of the means test is that if an individual debtor has sufficient net income to pay a significant portion of his or her consumer (non-business) debts under a Ch. 13 plan, the debtor should not be eligible for Ch 7.
A debtor cannot receive discharge in a Chapter 7 if they commenced their case within ___ ________ of a previous commencement of a Chapter 7.
A debtor cannot receive discharge in a Chapter 7 if they commenced their case within 8 years of a previous commencement of a Chapter 7.
Debtor has no business debts, but 56% of what she owes is to the IRS for overdue taxes. Will she be subject to the means test?
No, §101(8) and In re Westberry, courts have stated that tax debts are not consumer debt. Therefore, a majority of the debts are non-consumer so means test does not apply.
What is disposable monthly income?
This is income minus all monthly expenses (rent, food, gas, etc.)
Before the first meeting of the creditors, the debtor must produce a tax return for the year prior and certificate of credit counseling.
The section that contains the means test
Section 707(b)
A chapter 7 debtor can receive a discharge if they had filed a chapter ___ or ___ at least 6 years prior.
A chapter 7 debtor can receive a discharge if they had filed a chapter 12 or 13 at least 6 years prior.
Three months before she filed her petition, Alice won $5,000 in the lottery. She used these winnings to reduce some of her enormous bills, but finally decided that bankruptcy was her only recourse. Excluding lottery winnings her average monthly income was $3,000, but the winnings will inflate her 6 month average. Is there anything she can do to keep the winnings out of the calculations?
§707(b)(2)(B)(i) & §101(10A), Probably not, but she can explain special circumstances if she beats the presumption.
True or False: If your income is above the state median for the same household size, then you take your disposable income times 60, and if that is less than $8,175 then you have satisfied the means test.
True, see page 107 of the book.
An individual debtor who files chapter 7 or 13 will be denied discharge if they do not complete an _______ _____ ______ ______ _______ ______.
An individual debtor who files chapter 7 or 13 will be denied discharge if they do not complete an instructional course concerning personal financial management. See §727(a)(11) and §1328(g).
The means test only applies to ______ ______ whose debts are _____ ______.
The means test only applies to individual debtors whose debts are primarily consumer.
To receive a discharge in Chapter 13 a debtor must not have received a discharge from Ch. 7, 11, or 12 in the preceding ___ years or from Ch. 13 in the preceding __ years.
To receive a discharge in Chapter 13 a debtor must not have received a discharge from Ch. 7, 11, or 12 in the preceding 4 years or from Ch. 13 in the preceding 2 years. §1328(f).
Trevor makes $6,000 a month, but has a $6,500/month lifestyle. He was laid off and has not worked or received any income for the last month. If he files bankruptcy today what is his current monthly income.
$5,000, see §101(10A) average of 6 months (5 months x 6,000 divided by 6 months) = $5k
True or False: if your disposable income times 60 is greater than $13,650 then there is a presumption of abuse.
True, see page 107 (disposable income • 60 > $13,650 - this is abuse)
A debtor cannot file a petition unless they have completed the mandatory ____ _______.
A debtor cannot file a petition unless they have completed the mandatory Credit Counseling. §109(h).
If a debtor "fails" the means test there is a ______ __ _______.
If a debtor "fails" the means test there is a presumption of abuse. §707(b)(2)(A)(1).
Even if the debtor passes the means test, Ch. 7 relief still may not be available if either of the following are shown
§707(b)(3) - petition is in bad faith or totality of the circumstances of the debtor's financial situation demonstrates abuse
Debtor has an adjusted monthly income of $150 and her unsecured debt, mostly credit cards was $20,000. Assuming her income is above the state median, will she be eligible for Ch. 7?
$150(60) > 0.25(20,000)
$9,000 is greater than $6250 - debtor fails the means test
True or False: If your disposable income times 60 is between $8,175 and $13,650, then you must calculate and find whether your disposable income times 60 is greater than or equal to 25% of your unsecured non-priority debt.
True, see page 107 - if you are between those numbers you take your disposable income times 60 and see if its greater than or equal to unsecured non-priority debt times 0.25 - if so you are an abuser if no you satisfy the means test.
No, §109(g) cannot refile if debtor voluntarily dismissed within 180 days.
To rebut a presumption of abuse a debtor must show:
§707(b)(2)(B) - good to read over - but essentially that they have some additional expenses or special circumstances that prevent the debtor from entering a Ch. 13.
Debtor has an adjusted monthly income of $150 and her unsecured debt, mostly credit cards was $50,000. Assuming her income is above the state median, will she be eligible for Ch. 7?
$150(60) > 0.25(50,000)
$9,000 is less than $12,500 - debtor passes the means test