486 B.R. 251
Bankr. E.D.N.Y.2013Background
- UST moves to dismiss Persaud's second Chapter 7 case for abuse under § 707(b)(1), (2), (3).
- Debtor argues the ten-day statement under § 704(b)(1) was untimely, or merits-based defenses defeat abuse.
- Debtor filed Form 22A; claimed CMI after marital adjustment of non-debtor spouse's income was $7,821.81.
- UST disputes marital adjustment items (tuition, other) as household expenses reducing CMI.
- Court finds § 704(b)(1) ten-day statement timely from § 341 meeting conclusion; grants motion to dismiss.
- If the ten-day statement were untimely, Cadwallder-inspired reasoning supports no automatic dismissal; nonetheless, court reaches merits.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Timeliness of the ten-day statement | UST: timeliness measured from conclusion of § 341 meeting. | Persaud: timeliness measured from commencement date of § 341 meeting. | Ten-day statement timely from meeting conclusion. |
| Effect of untimely statement on § 707(b)(2) motion | UST: untimeliness bars motion under § 704(b)(2). | Persaud: untimely statement does not automatically bar motion. | Untimeliness does not bar motion; § 704(b) duty, not a strict limitations bar. |
| Treatment of tuition and other expenses as household vs non-household | UST: tuition and similar items are household expenses included in CMI. | Persaud: tuition paid by non-debtor spouse should be marital adjustment and deductible. | Tuition deemed household expenses; marital adjustment reduced, increasing CMI. |
| Special circumstances rebutting presumption | UST: no special circumstances; outside income not controllable by debtor. | Persaud: special circumstances exist because majority income not controlled by debtor. | Special circumstances do not rebut presumption; case dismissed. |
Key Cases Cited
- In re Close, 353 B.R. 915 (Bankr.D. Kan. 2006) (debate over timing of § 704(b) ten-day statement)
- In re Wise, 453 B.R. 220 (Bankr. D. Vt. 2011) (timing interpretation favoring conclusion of meeting)
- In re Reed, 422 B.R. 214 (C.D. Cal. 2009) (ten-day period from conclusion; policy efficiency)
- In re Molitor, 395 B.R. 197 (Bankr.S.D. Ga. 2008) (ten-day deadline runs from conclusion of meeting)
- In re Cadwallder, 2007 WL 1864154 (Bankr. S.D. Tex. 2007) (duty vs. penalty; no automatic dismissal for untimely statement)
- In re Robertson, 370 B.R. 804 (Bankr. D. Minn. 2007) (timeliness and procedural prerequisites for § 707(b)(2))
- In re Draisey, 395 B.R. 79 (Bankr. B.A.P. 2008) (timeliness and motion mechanics under § 704(b))
- In re Shahan, 367 B.R. 732 (Bankr. D. Kan. 2007) (tuition expenses as household costs when paid by non-debtor spouse)
- In re Vollen, 426 B.R. 359 (Bankr. D. Kan. 2010) (dependent’s college expenses treated as household expenses)
- In re Cotto, 425 B.R. 72 (Bankr. E.D.N.Y. 2010) (CMI includes non-debtor spouse income contributed regularly)
- Barnhart v. Peabody Coal, 537 U.S. 149 (Supreme Court 2003) (statutory timing provisions; penalties for noncompliance not implied)