Date of Decision:
July 23, 2010
Whether the United States Trustee should be granted summary judgment regarding its motion to dismiss for abuse under 11 U.S.C. § 707(b)(3) where the United States Trustee alleged Debtors had sufficient disposable income to fund a chapter 13 plan but where Debtors argued certain expenses and the need to save a six-month emergency fund prevented them from funding a plan?
The United States Trustee was granted summary judgment, and the case was dismissed. The Court calculated Debtors had at least $615.66 in monthly disposable income to fund a meaningful chapter 13 plan. The Court also concluded Debtors' unwillingness to find more affordable housing was also cause to dismiss the case for abuse because Debtors' monthly mortgage payment greatly exceeded the IRS allowance for a family of their size in their county of residence, the home required substantial maintenance, and the mortgage debt exceeded the value of the home by over $22,000.00.
Full Bankruptcy Court Decision: