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Michael Paul Behne, Ch. 7, BK16-41849-SKH (Aug. 25, 2017)

The debtor’s Chapter 7 means test showed monthly disposable income of $1,600, which exceeds the threshold for a presumption of abuse under the Bankruptcy Code. The debtor claimed special circumstances because he contributes $1,500 per month to the living expenses of his daughter’s and grandsons’ separate household.

The court ruled that the record did not sustain the debtor’s argument because there was no evidence the daughter’s alcoholism and ADHD were chronic or disabling conditions or that the debtor’s support was reasonable and necessary. In fact, the daughter was gainfully employed and lived independently with her two young sons. Even a small reduction in the debtor’s monthly contribution to his daughter would allow him to fund a Chapter 13 plan.

The court directed the debtor to convert the case to Chapter 13 or face dismissal.

Friday, August 25, 2017