In what was certainly the most novel and controversial provision of the 1984 consumer bankruptcy amendments, Congress limited the previously absolute right of a debtor to file a liquidation bankruptcy case. Section 707(b) of the Code establishes the "substantial abuse" test. Section 707(b) permits a bankruptcy court to dismiss a chapter 7 case, after notice and a hearing on it own motion or motion of the United States trustee and not at the request or even the suggestion of any party in interest, if the court finds that granting relief under chapter 7 would be a substantial abuse of its provisions.

Also:

Congress rejected the idea that a chapter 7 case should be dismissed if a debtor could pay only a portion of his or her debts, or could pay those debts only if they were stretched out over five years. In describing what ws meant by the term "substantial abust" in the Senate version of the bill, the Sentat Report limited the term of "substantial abuse" to those debtors who could meet their debts "without diffilculty as they came due". Other portions of the legislative history also show that Congress had no intent to reduce debtors to minimal standards of living to force them to pay their debts.

Back to my opinion:

Substantial abuse is defined differently by different Federal Circuits. From what I have read, it was generally intended to keep people with very high incomes from dumping their credit card debt and starting over with lots of money freed up.

I hate to be so cynical but, an attorney does make more money with a chapter 13.

Maybe you should call your attorney and ask why he/she thinks that your income is so high that it would be substantial abuse to file chapter 7 and then call another attorney and ask about your income and chapter 7.

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Re: What to do in our situation. JR 07/29/03 (0)

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