Case Administration - High-income debtors could proceed in Chapter 7 based, in part, on size of their priority debt. A Chapter 7 case filed by debtors who were living in a four-bedroom, lake- front home, who had combined net monthly income of $16,742.24, and who had leased a new luxury automobile, for more than $1,000 per month, only six months prepetition, would not be dismissed as a "substantial abuse" of the provisions of Chapter 7. The petition was filed in response to the debtor-husband's loss of a high-paying job which had enabled the debtors to earn more than $440,000 five years prepetition, and most of the debts that the debtors sought to discharge were three-years-old or older and were incurred at a time when the debtors were able to pay them. Moreover, the debtor-husband's current position required him to drive a high-end vehicle in order to establish and maintain business relationships with potential customers. Finally, such excess income as the debtors had to fund a hypothetical Chapter 13 plan would likely not result in any distribution to general unsecured creditors in light of the substantial priority claims, totaling more than $120,000, against the debtors.
Saturday, December 8, 2007
In re Tagliavia
Posted by Rachel Lynn Foley at 8:25 PM
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