You have filed chapter 7 bankruptcy, and everything was going smoothly, until you received a motion from the U.S. Trustee’s office under section 707(b). The U.S. Trustee (UST) says your case is an “abuse” of chapter 7 and that you can afford to repay part of your debts in a chapter 13! However, you know that’s simply not possible on your income, with all the household expenses you have. Now what do you do?
There’s a good chance that if you defend the 707(b) motion, you will either win in court, or the UST will withdraw its motion after your lawyer files a legal response to the motion. In fact, debtors who defend these motions are successful most of the time. It might well be worth paying your bankruptcy lawyer an additional fee to see if you can prevail in your chapter 7. The worst that can happen is that you lose, at which time you simply convert to chapter 13.
Ask your lawyer if he or she has defended 707(b) abuse motions before, and if so, ask about the outcome of those cases. An experienced bankruptcy lawyer will have defended at least half a dozen 707(b) motions, and possibly will have had other lawyers refer such cases to him or her for a defense.
Additionally, this might be a good time to get a second opinion, especially if your lawyer tells you such motions are hard to defend. It usually is easy to consult with another bankruptcy lawyer about a 707(b) motion, but remember that it’s best to do so in person.
Even though it may cost you some money to defend a section 707(b) motion, if you’re lucky, you’ll win — and your chapter 7 case will proceed to a discharge of your debts.
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Last modified: February 21, 2013