CHAPTER 7 DISMISSED DUE TO
DEBTOR’S SUBSTANTIAL ABUSE

In this case the court dismissed debtor’s Chapter 7 bankruptcy after discovering that only 76% of the debts scheduled were “consumer debts” and that the debtor had sufficient income to support a Chapter 13 repayment plan.

The Bankruptcy Code permits dismissal of a case if the debtor has committed “substantial abuse”, however, the Code does not define this phrase.

This court found, however, that the combination of debtor’s exaggeration of his monthly expenses, inclusion of business debts with the bankruptcy and debtor’s ability to repay his obligations through a Chapter 13 plan, all constituted “substantial abuse.” Case dismissed.  In re Goodson, 130 B.R. 897.

Author: Charles R. Harroun, Attorney at Law