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
Medical Creditor obtained a judgment against the Debtor and Non-Filing Spouse, with such lien attaching to the property that the Debtor and the Non-filing Spouse own as Tenants by the Entireties. After filing Chapter 7, the Debtor sought to avoid, pursuant to 11 U.S.C. § 522(f), the judgment lien.
The Bankruptcy Court first restated that property owned as Tenants by the Entireties “is a form of ownership where the husband and wife are each ‘deemed to be seized of the entire estate, with neither spouse having a separate or undivided interest therein.’” Accordingly, pursuant to 11 U.S.C. § 541(a), the Debtor’s interest in the property, i.e.… 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