The bankruptcy court held that despite the excision in BAPCPA of "substantial" from the abuse provision of 707(b)(3), that the factors laid out by the 4th Circuit in Green v. Staples, 934 F.2d 568 (4th Cir. 1991) were still good law. The “totality of the circumstances” approach involves an evaluation of factors such as the following:
(1) Whether the bankruptcy petition was filed because of sudden illness, calamity, disability, or unemployment;
(2) Whether the debtor incurred cash advances and made consumer purchases far in excess of his ability to repay;
(3) Whether the debtor’s proposed family budget is excessive or unreasonable;
(4) Whether the debtor’s schedules and statement of current income and expenses reasonably and accurately reflect the true financial condition; and
(5) Whether the petition was filed in good faith.
Green, 934 F.2d at 572.
The court held that "substantial abuse" from the pre-BAPCPA Code was indistinguishable from the current "abuse" standard. The Court cited Collier on Bankruptcy, "which opines that it is “doubtful that the grounds for dismissal will change much, despite the change in the standard from “substantial abuse’ to ‘abuse.’ Few, if any, courts permitted a case to go forward under prior law if they found it abusive. The general view appeared to be that any abuse was substantial and grounds for dismissal.” Collier on Bankruptcy ¶ 707.04[3][b], at 707-43 (Alan N. Resnick & Henry J. Sommer eds. 16th ed.)
Following the Green factors, the Court found that there had been ample evidence of job displacement, there had be few substantial consumer purchases for two years, there were no substantive errors in the petition, and no allegation of bad faith. The court rejected the assertion that the Debtors' budget was excessive, since the primary basis for that claim was the $325 a month in support they provided their 19-year old son.
Mitchell Case Bankruptcy Court Eastern District NC.PDF
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