In Re Singletary
- Reporters:
- , ,
- Before:
- Bohm
MEMORANDUM OPINION ON THE MOTION OF THE UNITED STATES TRUSTEE TO DISMISS CHAPTER 7 CASE PURSUANT TO
I. INTRODUCTION
LeManda and Jeffrey Singletary (the Debtors) filed a Chapter 7 petition on February 1, 2006 indicating that the presumption of abuse did not arise based on their belief that they had sufficient deductions to their current monthly income under
This Court holds that the mere act of declaring an intent to surrender collateral on a Statement of Intention does not extinguish the Debtors’ right to deduct those payments under
II. BACKGROUND OF AMENDED
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) became fully effective on October 17, 2005. One goal of the BAPCPA amendments was to regulate abuse in consumer bankruptcies. The abuse that concerned Congress was debtors receiving a full discharge under Chapter 7 when they had regular income that could be used to repay some portion of their unsecured debt in a Chapter 13 plan.
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The principal
The pre-BAPCPA version of
(A) No judge, United States trustee (or bankruptcy administrator, if any), trustee, or other party in interest may file a motion under paragraph (2) if the current monthly income of the debtor, including a veteran (as that term is defined in section 101 of title 38), and the debtor’s spouse combined, as of the date of the order for relief when multiplied by 12, is equal to or less than—
(i) in the case of a debtor in a household of 1 person, the median family income of the applicable State for 1 earner;
(ii) in the case of a debtor in a household of 2, 3, or 4 individuals, the highest median family income of the applicable State for a family of the same number or fewer individuals; or
(iii) in the case of a debtor in a household exceeding 4 individuals, the highest median family income of the applicable State for a family of 4 or fewer individuals, plus $ 525 per month for each individual in excess of 4.
(B) In a case that is not a joint case, current monthly income of the debtor’s spouse shall not be considered for purposes of subparagraph (A) if—
(i) (I) the debtor and the debtor’s spouse are separated under applicable nonbankruptcy law; or
(II) the debtor and the debtor’s spouse are living separate andapart, other than for the purpose of evading subparagraph (A); and
(ii) the debtor files a statement under penalty of perjury—
(I) specifying that the debtor meets the requirement of subclause (I) or
(II) of clause (i); and
(II) disclosing the aggregate, or best estimate of the aggregate, amount of any cash or money payments received from the debtor’s spouse attributed to the debtor’s current monthly income.
Current monthly income (CMI) is a new term defined in § 101(10A), which states:
(A) means the average monthly income from all sources that the debtor receives (or in a joint case the debtor and the debtor’s spouse receive) without regard to whether such income is taxable income, derived during the 6-month period ending on—
(i) the last day of the calendar month immediately preceding the date of the commencement of the case if the debt- or files the schedule of current income required by section 521(a)(l)(B)(ii); or
(ii) the date on which current income is determined by the court for purposes of this title if the debtor does not file the schedule of current income required by section 521 (a)(1)(B)(ii); and
(B) includes any amount paid by any entity other than the debtor (or in a joint case the debtor and the debtor’s spouse), on a regular basis for the household expenses of the debtor or the debtor’s dependents (and in a joint case the debtor’s spouse if not otherwise a dependent), but excludes benefits received under the Social Security Act, payments to victims of war crimes or crimes against humanity on account of their status as victims of such crimes, and payments to victims of international terrorism (as defined in section 2331 of title 18) or domestic terrorism (as defined in section 2331 of title 18) on account of their status as victims of such terrorism.
Thus, the first test of
The previous
However, a debtor’s “failure” on this part of the test is not an absolute bar to Chapter 7. Since “failing” this portion of the means test only creates a presumption,
(i) In any proceeding brought under this subsection, the presumption of abuse may only be rebutted by demonstrating special circumstances, such as a serious medical condition or a call or order to active duty in the Armed Forces, to the extent such special circumstances that justify additional expenses or adjustments of current monthly income for which there is no reasonable alternative.
(ii) In order to establish special circumstances, the debtor shall be required to itemize each additional expense or adjustment of income and to provide—
(I) documentation for such expense or adjustment to income; and
(II) a detailed explanation of the special circumstances that make such expenses or adjustment to income necessary and reasonable.
(iii) The debtor shall attest under oath to the accuracy of any information provided to demonstrate that additional expenses or adjustments to income are required.
(iv) The presumption of abuse may only be rebutted if the additional expenses or adjustments to income referred to in clause (i) cause the product of the debt- or’s current monthly income reduced by the amounts determined under clauses (ii), (iii), and (iv) of subparagraph (A) when multiplied by 60 to be less than the lesser of — •
(I) 25 percent of the debtor’s nonpri-ority unsecured claims, or $ 6,000, whichever is greater; or
(II) $ 10,000.
If the debtor either does not attempt, or fails, to rebut the presumption by showing special circumstances, the case must be dismissed or converted. However, if the debtor has “passed” by either not invoking the presumption of abuse or successfully rebutting the presumption with a showing of special circumstances, further analysis may still be necessary. The debt- or could still face a motion to dismiss under
(A) whether the debtor filed the petition in bad faith; or
(B) the totality of the circumstances (including whether the debtor seeks to reject a personal services contract and the financial need for such rejection as sought by the debtor) of the debtor’s financial situation demonstrates abuse. 6
In conclusion, there are three ways to pass the means tests of
(1) Have an annualized CMI that is below the state median income and pass the abuse tests of
(2) Exceed the median income, have sufficient expense deductions to avoid creating the presumption of abuse, and pass the abuse tests of
(3) Exceed the median income, have the presumption of abuse arise, rebut the presumption of abuse with special circumstances, and pass the abuse tests of
Even though only one type of deduction is at issue in this case—
The Court makes the following Findings of Fact and Conclusions of Law under
III. FINDINGS OF FACT
The principal facts of this case are not in dispute. The parties only disagree on the legal issue: whether the Debtors are allowed to deduct payments to secured creditors when they have stated their intention to surrender the collateral securing those debts. The facts, as stipulated to or admitted by counsel of record, or as admitted in the briefs and filings, are as follows:
1. On February 1, 2006, the Debtors filed for relief pursuant to Chapter 7 of the Bankruptcy Code. [Docket No. 1.] 7
2. On February 1, 2006, the Debtors filed a Statement of Intention which reflects their intent to surrender a 2004 GMC 3500 truck (the “Truck”) and their home at 17311 StonePeaks Drive, Houston, Texas, 77095 (the “Home”). [Docket No. 1.]
3. On February 3, 2006, the Debtors filed a Statement of Current Monthly Income and Means Test Calculation (Form B22A). [Docket No. 4.] The Debtors have not filed an amended Form B22A.
4. On line 42 of Form B22A, which allows for a deduction of future payments on secured claims, the Debtors listed a payment on the Truck of $647.67 and a mortgage payment on the House of $1,425.83. With these deductions, the Debtors’ Form B22A lists their monthly disposable income as a deficit of $308.49. [Docket No. 4.]
5. On March 7, 2006, the first meeting of creditors took place. [Docket No. 9.]
6. On March 17, 2006, in accordance with § 704(b)(1), the UST reviewed all materials filed by the Debtors and then filed the UST’s Statement of Presumed Abuse. [Docket No. 19.]
7. On March 28, 2006, the Court granted GMAC’s motion for relief from the automatic stay against the Truck. [Docket No. 21.]
8. On April 18, 2006, the UST filed its Motion to Dismiss Chapter 7 Case Pursuant to§ 707(b)(2) . [Docket No. 24.]
9. In calculating future payments on secured claims (Line 42 of Form B22A), the UST included only payments for the debts that the Debtors reaffirmed and not payments on secured property they had surrendered or intended to surrender. [Docket No. 24],
10. On April 21, 2006, the Debtors filed their Response to UST’s Motion to Dismiss. [Docket No. 25.]
11. On May 12, 2006, the Debtors filed their Brief of Debtor on UST’s Motion to Dismiss. [Docket No. 35.]
12. On May 16, 2006, Stipulations between the United States Trustee and the Debtors were filed. [Docket No. 37.] The only dispute between the parties is whether the Debtors are entitled to deduct payments of debts secured by property that the Debtors intend to surrender. Id.
13. On June 23, 2006, the UST filed its Brief in Support of Motion to Dismiss Pursuant to§ 707(b)(2) . [Docket No. 40.]
14. On June 28, 2006, the Debtors filed their Brief on UST’s Motion to Dismiss Pursuant to§ 707(b) . [Docket No. 43.]
15. On July 11, 2006, this Court held a hearing on the UST’s Motion to Dismiss Pursuant to§ 707(b)(2) . Counsel presented arguments and admitted exhibits into evidence.
16. The Debtors’ annual income is $71,956.56 [Docket No. 4, Form B22A] and exceeds the median income in Texas for a household of five, which is $62,546.00. [Docket Nos. 4, Form B22A; 37, ¶ 12.]
17. The Debtors’ debts are primarily consumer debts. [Docket No. 37, ¶ 6.] The Debtors’ unsecured non-priority debt totals $136,336.57. [Docket No. 37, ¶ 6.] The Debtors’ secured debt totals $176,382.00. [Docket No. 1, Summary of Schedules.]
IV. CONCLUSIONS OF LAW
A. The Debtors are above the median income for Texas, and therefore the means test of
The Debtors are a married couple with three dependent children. [Docket No. 4,
B. The means test is neither exclusively backward-looking, nor forward-looking, but a combination of both.
The main contention between the parties is not what debts should be counted under
The debtor in
Cortez
had been unemployed on the date of the filing of the petition but four days later found employment at an annual salary of $95,000.
Id.
at 451. Because this new job significantly changed the portion of unsecured debt that the debtor would be able to repay under a Chapter 13 plan, the United States Trustee filed a motion to dismiss for “substantial abuse” under the old version of
Although
Cortez
dealt with the pre-BAPCPA version of
The Debtors, relying on
In re Walker,
believe that the means test is exclusively a threshold eligibility test. They argue that the filing of the petition freezes the time at which the means test may be applied. Under their theory, if the presumption of abuse does not arise on the date of filing, it can never arise. While this position may be the most efficient from the point of view of the debtors’ bar, it is not supported by a reading of the Code and the relevant Fifth Circuit case law. Rule 1017(e) was changed to reflect the new rules for filing Presumption of Abuse Motions. While Rule 1017 still controls the time during which a
(1) With respect to a debtor who is an individual in a case under this chapter—
(A) the United States trustee (or the bankruptcy administrator, if any) shall review all materials filed by the debt- or and, not later than 10 days after the date of the first meeting of creditors, file with the court a statement as to whether the debtor’s case would be presumed to be an abuse undersection 707(b) ; and
(B) not later than 5 days after receiving a statement under subparagraph (A), the court shall provide a copy of the statement to all creditors.
(2) The United States trustee (or bankruptcy administrator, if any) shall, not later than 30 days after the date of filing a statement under paragraph (1), either file a motion to dismiss or convert undersection 707(b) or file a statement setting forth the reasons the United States trustee (or the bankruptcy administrator, if any) does not consider such a motion to be appropriate, if the United States trustee (or the bankruptcy administrator, if any) determines that the debtor’s case should be presumed to be an abuseunder section 707(b) and the product of the debtor’s current monthly income, multiplied by 12 is not less than—
(A) in the case of a debtor in a household of 1 person, the median family income of the applicable State for 1 earner; or
(B) in the case of a debtor in a household of 2 or more individuals, the highest median family income of the applicable State for a family of the same number or fewer individuals.
According to this section, the UST could file a motion up to 40 days after the § 341(a) meeting.
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That fact, combined with the holding in
Cortez,
leads this Court to conclude that the Presumption of Abuse Motion may be based on a means test calculation that includes any changed circumstances in the Debtors’ position between the filing of the petition and the filing of the motion to dismiss. In the case at bar, the UST filed its motion to dismiss on April 18, 2006. [Docket No. 24.] Therefore, to determine whether the presumption of abuse arises, the means test must be applied on that date. Having now determined when to calculate the means test, one issue remains: what payments can be deducted as “scheduled as contractually due” under
C. Under
The dispute between the parties in this case turns upon the meaning of the language “scheduled as contractually due to secured creditors in each month of the 60 months following the date of the petition.”
The role of the judiciary is to interpret a statute “according to its terms.”
United States v. Ron Pair Enters.,
489 U.S. 235, 241, 109 S.Ct. 1026, 1030, 103 L.Ed.2d 290, 298 (1989) (quoting
Caminetti v. United States,
242 U.S. 470, 485, 37 S.Ct. 192, 194, 61 L.Ed. 442, 452-53 (1917)). Therefore, a court must begin its analysis of a statute with the plain language.
Id.
(citing
Landreth Timber Co. v. Landreth,
471 U.S. 681, 685, 105 S.Ct. 2297, 2301, 85 L.Ed.2d 692, 696-97 (1985));
In re Walker,
2006 WL 1314125, at *3, 2006 Bankr.LEXIS 845, at *8-9 (citations omitted). When analyzing, “courts should strive to give operative meaning to every word in a statute.”
Tesfamichael v. Gonzales,
411 F.3d 169, 175 (5th Cir.2005) (citing
Walters v. Metro. Educ. Enters., Inc.,
519 U.S. 202, 209, 117 S.Ct. 660, 664, 136 L.Ed.2d 644, 652 (1997)). Then, as
I. “Scheduled”
A major reason that the court in
Walker
was able to arrive at its decision was that it used a dictionary definition of the word “scheduled,” and defined it for purposes of
This Court is keenly aware of the Debtors’ obligation to amend their schedules.
In re Cortez,
457 F.3d at 457-58. This duty extends not only to changes in income, but also to changes in expenditures.
See,
Schedule J, Line 19 (“Describe any increase or decrease in expenditures reasonably anticipated to occur within the year following the filing of this document”). The UST is correct in interpreting “scheduled” to refer to whether a debt currently appears on the Debtors’ schedule but goes too far in asserting that merely declaring an intent to surrender the collateral on a Statement of Intention is sufficient to make that debt no longer “scheduled” for purposes of
Drawing on the discussion above regarding the appropriate window to conduct a means test, the appropriate meaning of “scheduled” in the context of
“The common meaning of ‘as contractually due’ is that the debtor is legally obligated under the contract ... to make a payment in a certain amount, with a certain amount of interest, for a set number of months into the future.” In re Walker, 2006 WL 1314125, at *3, 2006 Bankr.LEXIS 845, at *9. Putting together the first two pieces, the phrase “scheduled as contractually due” refers to debts that: (1) appear on the debtor’s schedules as of the date of the Presumption of Abuse Motion; and (2) the debtor has a contractual obligation to continue paying in the future. Again, the mere act of filing a petition does not terminate the contractual obligation on that debt. Further, filing a Statement of Intention to surrender collateral does not in and of itself terminate the contractual obligation of the debtor. Even surrendering the collateral of secured debts does not end the contractual relationship.
“The surrender of the collateral does not change the fact that the payments are ‘contractually due.’ When a debtor files the bankruptcy petition, the debtor is contractually due for payments on the outstanding secured debts for the length of the contract. The debtor’s contractual liability for the debt is not eliminated upon the surrender of the collateral. At the earliest, it may be eliminated by the entry of the discharge. At the latest, the contractual obligation may never actually be eliminated, but instead, the creditor would merely be enjoined from collecting the debt from the debtor in personam. See Hall v. National Gypsum, Inc., 105 F.3d 225 (5th Cir.1997). In other words, nothing the debtor does or does not do changes the fact that scheduled payments remain contractually due.”
Id., 2006 WL 1314125, at *4, 2006 Bankr.LEXIS 845, at *12-13.
In the present case, the debts on both the House and the Truck were still “contractually due” even though the debt secured by the Truck should no longer be “scheduled” as a secured debt. The phrase “scheduled as contractually due” defines what type of debt payments should be deducted under
3. “To secured creditors”
The first limitation is that the debt must be to a “secured creditor.” The phrase “secured creditor” is no longer defined in the Code. Interestingly, this was a defined term under the Bankruptcy Act of 1898, which states: “ ‘Secured creditor’ shall include a creditor who has security for his debt upon the property of the bankrupt of a nature to be assignable under this Act, or who owns such a debt for which some indorser, surety, or other persons secondarily liable for the bankrupt has such security upon the bankrupt’s assets.”
(1) An allowed claim of a creditor secured by a lien on property in which the estate has an interest, or that is subject to setoff under section 553 of this title, is a secured claim to the extent of thevalue of such creditor’s interest in the estate’s interest in such property, or to the extent of the amount subject to set-off, as the case may be, and is an unsecured claim to the extent that the value of such creditor’s interest or the amount so subject to set off is less than the amount of such allowed claim. Such value shall be determined in light of the purpose of the valuation and of the proposed disposition or use of such property, and in conjunction with any hearing on such disposition or use or on a plan affecting such creditor’s interest.
(2)If the debtor is an individual in a case under chapter 7 or 13, such value with respect to personal property securing an allowed claim shall be determined based on the replacement value of such property as of the date of the filing of the petition without deduction for costs of sale or marketing. With respect to property acquired for personal, family, or household purposes, replacement value shall mean the price a retail merchant would charge for property of that kind considering the age and condition of the property at the time value is determined.
This Court agrees with
Walker
to the extent that a debtor’s Statement of Intention to surrender collateral alone is not enough to prevent the creditor from being a secured creditor, particularly because a debtor has the right to amend that Statement of Intention to reaffirm or redeem the collateral within 30 days after the § 341(a) meeting, which can be extended by the court for cause.
(a) A secured party’s acceptance of collateral in full or partial satisfaction of the obligation it secures:
(1) discharges the obligation to the extent consented to by the debtor;
(2) transfers to the secured party all of a debtor’s rights in the collateral;
(3) discharges the security interest or agricultural lien that is the subject of the debtor’s consent and any subordinate security interest or other subordinate lien; and
(4) terminates any other subordinate interest.
According to this section of the UCC, the debtor no longer has any interest in the collateral after it has been accepted by the creditor. Since
4. “In each month of the 60 months following the date of the petition”
The UST interprets this phrase to be a minimum limit. It asserts that there must be at least one month post-petition where the debt would be due. Since no payments will be made after the collateral is surrendered, the Debtors should not be allowed to deduct any payments for debts they intend to surrender. This argument again confuses the act of surrendering collateral with the mere election to surrender on the Statement of Intention. If a debtor simply indicates an intent to surrender but has not yet actually done so, that debt would still be due in the post-petition period. Rather than a minimum limitation, this Court finds that this clause is more accurately a maximum limit. This was the position taken by the court in Walker, which stated:
[T]he debtor may have a car loan with a remaining payment term of only two years, or a mortgage with a remaining payment term of twenty years. The debtor would include only the remaining twenty-four months of the car loan payments, but would add all sixty months of the mortgage payments in order to calculate the average monthly payment on secured debts.
In re Walker, 2006 WL 1314125, at *3, 2006 Bankr.LEXIS 845, at *9-10.
Therefore, this Court concludes that, under
5. Limits in other subsections of
The UST attached to its supplemental filing of August 31, 2006 [Docket No: 45] an unpublished ease from the Eastern District of Missouri,
In re Skaggs
(Case No. 06-40457), which presents the same facts and reaches the opposite result from
Walker.
Beyond the obvious fact that this is an unpublished opinion and has no precedential value, this Court is not persuaded by the reasoning the court used in criticizing
Walker.
This case dealt with the same problem of debtors claiming deductions under
Skaggs
reads
Likewise, the phrases “actual expenses” and “reasonably necessary” appear several times throughout
If the intent were to permit only those payments that would actually be made in the post-petition period, Congress could have specified that the payments to be deducted are only those payments to be made on secured debts that the debtor intends to reaffirm. For example, the second clause ofsection 707(b)(2)(A)(iii) also permits the debtor to deduct from CMI payments that would be required in a Chapter 13 case to ‘cure’ and reinstate a secured debt through a Chapter 13 plan. This subsection limits such deductions only to those debts secured by collateral that is necessary for the debt- or’s support, such as a residence or a vehicle. Had Congress intended to limit the general deduction for secured debt payments to only those debts being reaffirmed or to those items of collateral necessary for the debtor’s support during the post-petition period, it could have included similar language in the first clause ofsection 707(b)(2)(A)(iii) . However, there are no such restrictions on the payments to be deducted under the former clause.
In re Walker, 2006 WL 1314125, at *4, 2006 Bankr.LEXIS 845, at *11-12.
Therefore, the limits found in other subsections of
D. Without deducting the payments on the Truck, the presumption of abuse arises in this case.
Having determined that, under
Hypothetical Form B22A for the Debtor
Part II. Calculation of Monthly Income for
Line Number Description Amount
Gross Wages, etc. $ 5,996.38
12 Total CMI 5,996.38
Part III. Application of
13 Annualized CMI $71,956.56
14 Median Family Income (5) 14 $62,546.00 15
Part IV. Calculation of Current Monthly Income for
18 CMI for
Part V. Calculation of Deductions Allowed Under
Subpart A: Deductions Under Standards of the IRS
19 National Standards: food, clothing, etc. 1,773.00
20A Local Standards: Housing and Utilities, non-mortgage $ 495.00
20B Local Standards: mortgage/rent expense $ 0.00 16
a. IRS Housing and Utilities $ 966.00
b. Average Monthly Payment for any debts _secured by your home_($1,425.83)_
22 Local Standards: Transportation, operation 281.00
23 Local Standards: Transportation, ownership/lease 0.00
25 Other Necessary Expenses: Taxes 228.97
26 Other Necessary Expenses: Mandatory Payroll deductions $ 238.70
27 Other Necessary Expenses: Life Insurance $ 75.00
30 Other Necessary Expenses: Childcare $ 200,00
31 Other Necessary Expenses: Health Care 25.00
32 Other Necessary Expenses: Telecommunications $ 200,00
33 Total Expenses under IRS standards 3,516.67
Subpart B: Additional Expense Deductions under
38 Education Expenses for dependent children less than 18 $ 10.00
41 Total of Subpart B 362.71
Subpart C: Deductions for Debt Payment
42 Future payments on secured claims 1,526.24
a. Conn’s Credit Corp. $ 17.73
b. HSBC/Suzuki $ 57.40
e. Homeowners $ 25.28
d. Household Mortgage_ $1,425.83
45 Chapter 13 Administrative Expense 152.62
Total deductions for debt payment $ 1,678.86
Subpart D: Total Deductions
47 Total of all deductions allowed (sum of lines 33, 41, and 46) $ 5,558.24
Part YI. Determination of
48 Amount from Line 18 (CMI) 5,996.38
49 Amount from Line 47 (total deductions) 5,558.24
50 Monthly disposable income 438.14
51 60 month disposable income $26,288.40
V. Conclusion
The Debtors present a sympathetic argument as to why they are not the typical “abusive” debtor Congress had envisioned in enacting BAPCPA and imposing the new means test. “When the Debtors filed their petition, they recognized that they were unable to meet their existing financial obligations and, therefore, they sought relief under the Code. They made a financially responsible choice to surrender property they could not afford in order to ensure that they received the fresh start afforded by Chapter 7.”
In re Walker,
2006 WL 1314125, at *7, 2006 Bankr.LEXIS 845, at *23. Unfortunately for the Debtors, this Court is unable to follow the
Walker
court’s analysis of
The Debtors filed a Declaration of Special Circumstances [Docket No. 23], but any alleged special circumstances were not addressed at the hearing and no evidence has been presented to the Court. Therefore, there is not a sufficient basis
Notes
. All section references are to 11 U.S.C. unless otherwise noted.
. The same result would occur under
. “[BAPCPA] was intended to address what Congress perceived to be certain abuses of the bankruptcy process. Among the abuses identified by Congress was the easy access to chapter 7 liquidation proceedings by consumer debtors, who if required to file under chapter 13, could afford to pay some dividend to their unsecured creditors.” In re Hardacre, 338 B.R. 718, 720 (Bankr.N.D.Tex.2006) (citing 151 Cong.Rec. S2459, 2469-70 (Mar. 10, 2005)). “The Bankruptcy Reform Act of 2005 asks the very fundamental question of wheth er repayment is possible by an individual. It is this simple: If repayment is possible, then he or she will be channeled into chapter 13 of the Bankruptcy Code which requires people to repay a portion of their debt as a precondition for limited debt cancellation.... This bill does this by providing for a means-tested way of steering people ... who can repay a portion of their debts, away from chapter 7 bankruptcy ....” Eugene Wedoff, Means Testing in the New 707(b), 79 Am. Bankr. L.J. 231 (2005) (quoting 151 Cong. Rec. SI856, (Mar. 1, 2005) (statement of Sen. Grassley)).
. The Bankruptcy Court for the Southern District of Texas adopted the Interim Bankruptcy Rules in their entirety without change on October 5, 2005. Bankr.S.D. Tex. General Order 2005-6. Therefore, all references to the Federal Rules of Bankruptcy Procedure mean the Interim Rules as adopted by the Southern District of Texas.
. The amount of $100 is derived by dividing $6,000 by 60 monthly payments. The amount of $167 is derived by dividing $10,000 by 60 monthly payments. These dollar amounts and the 60 month period are codified in
In considering under paragraph (1) whether the granting of relief would be an abuse of the provisions of this chapter, the court shall presume abuse exists if the debtor’s current monthly income reduced by the amounts determined under clauses (ii), (iii), and (iv), and multiplied by 60 is not less than the lesser of—
(I) 25 percent of the debtor‘s nonpriority unsecured claims in the case, or $ 6,000, whichever is greater; or
(II) $ 10,000.
. If the deadline for the UST to file a motion based on the presumption of abuse, as discussed
infra
at note 10, and the UST elects to file a motion under
. In this Memorandum Opinion, all references to docket numbers relate to the docket sheet in Case No. 06-30339, unless otherwise noted.
. See Census Bureau Median Family Income By Family Size (in 2004 Inflation Adjusted Dollars), available at http://www.usdoj.gov/ ust/eo/ bapcpa/20051017/bci_data/median_in-come_table.htm.
. The Debtor-husband had performed holiday seasonal work at the end of 2005 but was unemployed when the petition was filed in February of 2006. CMI is based on an average of the six-month period prior to the filing of the bankruptcy petition; therefore, the Debtors’ CMI is much greater than their actual present income. The Debtors do not dispute the calculation of their CMI and agree that the husband’s unemployment is relevant only to their burden of showing special circumstances should the presumption of abuse arise. [Docket No. 23.]
. The 40 days is calculated as follows: (1) the UST has up to 10 days after the meeting of the creditors to file a statement setting forth whether the debtor’s case would be presumed to be an abuse; (2) then, assuming the UST takes the entire 10 days to file this statement, the UST has up to another 30 days thereafter to file a Presumption of Abuse Motion.
. As the title of the document suggests, a declaration made on the Statement of Intention is not immediately binding and does not mean that the collateral as already been surrendered. Rather, it is merely a declaration of an intent to surrender the collateral in the future which can be amended by the debtor for 30 days after the first meeting of creditors.
. The UST also failed to include any amount for the Chapter 13 administrative expense on Line 45. The Court believes this omission to be a drafting oversight and not an assertion that the Debtors are not entitled to this deduction.
. The section headings and line numbers in this chart correspond with Form B22A.
. The Debtors filed their petition on February 1, 2006 and are therefore subject to the 2004 IRS and Census information. The 2005 data applies only to cases filed after February 12, 2006.
. As discussed in Section IV.A, the Debtors annualized CMI exceeds the Texas median income and they are therefore subject to the means test in
. If the mortgage payments were not going to be allowed as deductions under
. The debtor is required by