Ms. Hamilton-Conversano filed Chapter 7 without her husband. Other than the couple’s secured debts, Mr. Conversano had no debts of his own and Mrs. Hamilton-Conversano had one American Express card, with a balance of $46,669.52, which they had jointly used to pay for all household expenses.
In completing her Means Test, Ms. Hamilton-Conversant took a “marital adjustment” to her husband’s contribution to her Current Monthly Income including $417.86, for the full monthly cost of their child’s private school. The Bankruptcy Administrator argued in that the private school contribution, even though made by the non-filing spouse, was capped by statute at $160.42.… Read More
The Debtor excluded $3,913.02 as a marital adjustment to the means test, providing only the phrase “Husband’s Expenses” as the basis for the deduction and failing to include any amounts on Schedule I. At the request of the Bankruptcy Administrator, the Debtor itemized this amount as follows:
Trash Pick-up $71.00
Home Maintenance $300.00
Household Cleaning Supplies $75.00
The Bankruptcy Administrator contended that these were not separate expenses of the non-filing spouse, but instead were for the benefit of the debtor and could be included within the marital adjustment. The bankruptcy court agreed, further finding that the original marital adjustment was inflated by several thousand dollars.… Read More
The Debtor, following some corrective amendments, had $731.36 of disposable income showing on Form B22. Because of a long commute in a pick-up truck with poor mileage, the Debtor claimed $612.00 a month of additional transportation expenses as a special circumstance under 11 U.S.C. § 707(b)(2)(B)(i). While not finding that high commuting costs never could be a special circumstance, the bankruptcy court did, however, hold that, as the Debtor had made this commute for more than 10 years, but had purchased the pick-up truck with poor mileage only 5 years ago, there were “more reasonable alternatives to the Debtor’s current mode of transportation that would reduce his expenses.”
For a copy of the opinion, please see:
Mansfield-High Commuting Costs are not a Special Circumstance for 707(b)(2).pdf… Read More
The Debtor filed Chapter 7 and was the subject of a random audit. The audit determined that the Debtor had understated her Current Monthly Income by $4,572. In response, the Debtor filed multiple amendments variously showing net monthly income of $589.92 (original), $4,272.71 (first amendment), $2,446.71 (second amendment), or -$179.29 (third amendment).
The Bankruptcy Administrator moved to dismiss based on the schedules being a “moving target”. The Debtor explained the difficulty as resulting from the Debtor’s non-filing spouse, who is the family ‘breadwinner’ and an independent truck driver, being unwilling to share his financial information with his wife. As such, the Debtor’s original petition was a “best guess” as to her non-filing spouse’s income.… Read More
The Debtor excluded from her CMI her non-filing husband’s monthly payments of $166.00 for his student loans and $1,628.00 related to their former residence, including renovation costs.. This resulted in a negative disposable monthly income. The Bankruptcy Administrator argued that since the non-filing spouse was spending money on expenses and renovations of joint property, such payments were benefitting the Debtor and should be included in CMI.
First the Bankruptcy Court and then, on appeal, the District Court agreed with the Debtor, finding that 11 U.S.C. § 101(10A)(B) included within the Debtor’s CMI “any amount paid by any entity other than the debtor … on a regular basis for the household expenses of the debtor or the debtor’s dependents….” The District Court examined the term “household expenses” by looking to the definition used by the 4th Circuit for the similar term “household goods” in In re McGreevy, 955 F.2d 957, 961-962 (1992), as “those items of person property that are typically found in or around the home and used by the debtor or his dependents to support and facilitate day-to-day living within the home, including maintenance and upkeep of the home itself.” Even if the non-filing husband were to stop paying these debts, “it would not affect the day-to-day functioning of the debtor’s household.”
The Bankruptcy Administrator also objected under the “totality of the circumstances” test of 11 U.S.C.… Read More