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04
Jan
2021

Substantial Abuse: Bankruptcy Dismissed

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 specifically 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” and the Court dismissed the case. In re Goodson, 130 B.R. 897.

Author: Charles R. Harroun, Attorney at Law



This entry was posted on Monday, January 4th, 2021 at 9:05 am and is filed under Bankruptcy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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