All posts in Abuse – Sec 707

Judge Scott Clarkson Affirmed by 9th Circuit – When is a Home Mortgage not a Consumer debt?

Aspen Skiing Company v. Cherrett (In re Cherrett), — F.3d —, (9th Cir. Oct, 2017)

Issue:   Is a loan taken out to buy a place to live necessarily a consumer debt for section 707(b) purposes?

Holding:   No.   It depends on the debtor’s intent when the loan is incurred.

Appeal from BAP, Kirscher, Dunn, Taylor

Bap appeal from order of Judge Scott Clarkson

Judge Morgan Christen, dissent Jacqueline H. Nguyen Read more…

Current Monthly Income When Only One Spouse Files

I have been working on the third edition of my Summary of Bankruptcy Law.  I hope to have it finished this summer.  I noticed a statement I made in the second edition that when a spouse files without the other spouse, the debtor’s current monthly income or CMI is the CMI of both spouses.  I started wondering where it says that and whether that’s even right.  I asked a few friends to comment and of course the simple question became complex although I think, thanks to a couple friends, we at least can give you a straight answer. Read more…

Quick Blurb About Section 109(g)

Under 109(g), an individual (or family farmer) may not be a debtor if “(2) the debtor requested and obtained the voluntary dismissal of the case following the filing of a request for relief from the automatic stay provided by section 362 of this title

I tell my clients that if we move to voluntarily dismiss a case after a relief from stay motion is filed, there will be a 180 day bar to refiling. Something in my brain changed the word from “following” to “after.” It turns out that they do not mean the same thing. Read more…

Judge R. Posner Writing Entertains Again

I’ve always been a fan of Justice Robert Jackson’s writing.  Judge Posner, of the Seventh Circuit, reminds me of such entertaining writing.  I hope he accepts the next invitation to join the supreme bench.

In response to debtor’s argument that 707(a)’s grounds for dismissal are exclusive, Judge Posner rebuts by saying:

The fact that the three grounds in §707(a) are introduced by “including” tugs against the argument that they are exclusive, or that they exhaust the statute.   If you tell your maid to iron your clothes, including your Bond Street tuxedo and its cummerbund, there is no implication that she is not to iron your other clothes.

Read more…

9th Circuit BAP Rules that Bankruptcy Court may Consider Postpetition Events as Part of the Totality of the Circumstances

In re Ng may be accessed here.  The Debtor’s income increased after he filed.  The BAP says that the bankruptcy court may condsider that as part of the totality of the circumstances when deciding whether to dismiss a chapter 7 under section 707(b)(3).  By the way, the lower court also ruled that a debtor may deduct mortgage payments on the means test, even if he intends to surrender or abandon the home.  Since that ruling was irrelevant, the BAP did not discuss it.