What Is A “Presumption Of Abuse” Statement From The United States Trustee?
By Karen Oakes, Southern Oregon Bankruptcy Attorney on Oct 16, 2007 in Bankruptcy Practice and Procedure, Chapter 13 Bankruptcy, Chapter 7 Bankruptcy, General Bankruptcy Information
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, in addition to placing new paperwork requirements on debtors, also placed new duties on the United States Trustee’s Office. Now, the United States Trustee must review all Chapter 7 bankruptcy filings and determine whether there is a “presumption of abuse”. The Office must file a statement of its finding of abuse within 10 days of the debtor’s meeting with the Chapter 7 trustee; the statement gets filed with the Bankruptcy Court. The Trustee reviews the “Means Test” form compared with the last sixty days of paystubs for the debtor. The United States Trustee can also request additional paperwork in order to make that determination. If the trustee determines that perhaps the filing of a Chapter 7 is “abusive”, then the next step is usually the filing of a Motion to Dismiss the Chapter 7 case (which can be translated into “we don’t think you belong in Chapter 7 — move the case into Chapter 13 or we will try to dismiss your case!!”).
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