William Stanley Kowal & Ramona Anne Kowal, Ch. 7, BK12-82897-TLS (Sept. 27, 2013)
The court granted the U.S. Trustee’s motion to dismiss this Chapter 7 case for abuse. The debtors are repaying a 401(k) loan, which is considered a “special circumstance” for rebutting the presumption of abuse. However, the loan will be paid off in 18 months, so those monthly payment amounts will be disposable income which would provide a significant payment to unsecured creditors. In addition, the potential fluctuations in the debtors’ income and expenses over the life of a Chapter 13 plan do not constitute “special circumstances” sufficient to rebut the presumption of abuse. Chapter 13 is designed to allow for plan modifications to accommodate changes in circumstances.