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 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
Despite testimony from the Debtors that they anticipated a substantial decrease in income due to loss of overtime, the court found that it was the circumstances at the time of the hearing that controlled. Taken with the Debtors’ retention of a boat, their failure to disclose tax refunds, overtime and bonuses, and continued 401k contributions, dismissal was appropriate.
For a copy of the opinion, please see:
Depriest- Dismissal under § 707(b)(3) looks to circumstances at the time of the hearing.pdf… Read More
The Debtor filed Chapter 13 in 2009, subsequently converting to Chapter 7 on May 9, 2011. This conversion was one day prior to a hearing to determine the status of the claim of the Debtor’s ex-wife, Ms. Day.
Ms. Day argued that the conversion was only done in an attempt to avoid paying her claim through the Debtor’s Chapter 13 plan, which otherwise only required $21.50 to complete. Additionally, Ms. Day alleged that the Debtor self-reported environmental hazards on their property, in an effort to reduce the value. Accordingly, Ms. Day sought to have the Debtor’s Chapter 7 dismissed pursuant to 11 U.S.C.… Read More