Debtors who failed to substantiate Special Circumstances could Not Rebut the Presumption of Abuse under means test

Debtors who failed to substantiate Special Circumstances could Not Rebut the Presumption of Abuse under means test

1. The United States Trustee filed her Motion to Dismiss Pursuant to 11 U.S.C. § 707(b)(a) and (2) (the “Motion to Dismiss”) on May 31, 2017, Docket No. 19.

2. The Debtors filed a petition for relief under Chapter 7 of the United States Bankruptcy Code (the “Case”) on March 21, 2017 (the “Petition Filing Date”).

3. The Debtors are individuals whose debts appear to be primarily consumer in nature.

4. . The Debtors have a household size of four, consisting of themselves and two children.

5. As of the Petition Filing Date, the applicable median family income for a family of four living in their state  was $76,600.

6. The Debtors disclose Current Monthly Income (“CMI) of $6,282.36 for Husband and $2,533.89 for Wife on Trustee’s Exhibit 2, the Debtors’ first-filed Form 122A. These amounts equal an annual household CMI of $105,795.

7. The Debtors disclose Current Monthly Income (“CMI) of $6,196.52 for Husband and $2,722.60 for Wife on Trustee’s Exhibit 3, the Debtors’ amended Form 122A. These amounts equal an annual household CMI of $107,029.44.

8. The Debtors list unsecured debts totaling $26,739.52 on Schedule F of their Schedules.

9. On Line 56 of Form 122A, the Debtors disclosed a payment of $363.59 per month for repayment of a 401k loan. Assuming that the Debtors continue making monthly payments of $363.59, the 401k loan will be paid in full on ___, 201___.

10. On Schedule I, Line 8, the Debtors disclose an expense of $400 per month for childcare. Ms. Challis testified at the Debtors’ 11 U.S.C. § 341 meeting of creditors that the correct amount for the childcare expense is $433 per month.

The Court finds the following additional facts:

11. The Amended Means Test Form (Trustee’s Exhibit 3) is Debtors’ most coherent sworn statement regarding Debtors’ contention that granting the relief requested by Debtors’ chapter 7 petition would not constitute an abuse justifying dismissal of this Case under Bankruptcy Code § 707(b).

12. At the Hearing, Debtors’ counsel conceded that Debtors’ repayment of a 401(k) loan should not be included among the “special circumstances” that the Court should consider under § 707(b)(2)(B) to determine if Debtors have rebutted any presumption of abuse. Therefore, the Court should ignore the $363.59 monthly deduction claimed in line 43 of the Amended Means Test Form.

13. Debtors’ monthly disposable income, calculated using their Amended Means Test Form (even after allowing all expenses or adjustments referred to in § 707(b)(2)(B)(i)), is no less than $404.92 (the “Debtors’ Best Net Amount”). Multiplying Debtors’ Best Net Amount by 60 yields $24,295.20.

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