11 U.S.C. § 707 : US Code - Section 707: Dismissal of a case or conversion to a case under chapter 11 or 13

Search 11 U.S.C. § 707 : US Code - Section 707: Dismissal of a case or conversion to a case under chapter 11 or 13

      (a) The court may dismiss a case under this chapter only after
    notice and a hearing and only for cause, including - 
        (1) unreasonable delay by the debtor that is prejudicial to
      creditors;
        (2) nonpayment of any fees or charges required under chapter
      123 of title 28; and
        (3) failure of the debtor in a voluntary case to file, within
      fifteen days or such additional time as the court may allow after
      the filing of the petition commencing such case, the information
      required by paragraph (1) of section 521(a), but only on a motion
      by the United States trustee.

      (b)(1) After notice and a hearing, the court, on its own motion
    or on a motion by the United States trustee, trustee (or bankruptcy
    administrator, if any), or any party in interest, may dismiss a
    case filed by an individual debtor under this chapter whose debts
    are primarily consumer debts, or, with the debtor's consent,
    convert such a case to a case under chapter 11 or 13 of this title,
    if it finds that the granting of relief would be an abuse of the
    provisions of this chapter. In making a determination whether to
    dismiss a case under this section, the court may not take into
    consideration whether a debtor has made, or continues to make,
    charitable contributions (that meet the definition of "charitable
    contribution" under section 548(d)(3)) to any qualified religious
    or charitable entity or organization (as that term is defined in
    section 548(d)(4)).
      (2)(A)(i) 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.

      (ii)(I) The debtor's monthly expenses shall be the debtor's
    applicable monthly expense amounts specified under the National
    Standards and Local Standards, and the debtor's actual monthly
    expenses for the categories specified as Other Necessary Expenses
    issued by the Internal Revenue Service for the area in which the
    debtor resides, as in effect on the date of the order for relief,
    for the debtor, the dependents of the debtor, and the spouse of the
    debtor in a joint case, if the spouse is not otherwise a dependent.
    Such expenses shall include reasonably necessary health insurance,
    disability insurance, and health savings account expenses for the
    debtor, the spouse of the debtor, or the dependents of the debtor.
    Notwithstanding any other provision of this clause, the monthly
    expenses of the debtor shall not include any payments for debts. In
    addition, the debtor's monthly expenses shall include the debtor's
    reasonably necessary expenses incurred to maintain the safety of
    the debtor and the family of the debtor from family violence as
    identified under section 302 of the Family Violence Prevention and
    Services Act, or other applicable Federal law. The expenses
    included in the debtor's monthly expenses described in the
    preceding sentence shall be kept confidential by the court. In
    addition, if it is demonstrated that it is reasonable and
    necessary, the debtor's monthly expenses may also include an
    additional allowance for food and clothing of up to 5 percent of
    the food and clothing categories as specified by the National
    Standards issued by the Internal Revenue Service.
      (II) In addition, the debtor's monthly expenses may include, if
    applicable, the continuation of actual expenses paid by the debtor
    that are reasonable and necessary for care and support of an
    elderly, chronically ill, or disabled household member or member of
    the debtor's immediate family (including parents, grandparents,
    siblings, children, and grandchildren of the debtor, the dependents
    of the debtor, and the spouse of the debtor in a joint case who is
    not a dependent) and who is unable to pay for such reasonable and
    necessary expenses.
      (III) In addition, for a debtor eligible for chapter 13, the
    debtor's monthly expenses may include the actual administrative
    expenses of administering a chapter 13 plan for the district in
    which the debtor resides, up to an amount of 10 percent of the
    projected plan payments, as determined under schedules issued by
    the Executive Office for United States Trustees.
      (IV) In addition, the debtor's monthly expenses may include the
    actual expenses for each dependent child less than 18 years of age,
    not to exceed $1,500 per year per child, to attend a private or
    public elementary or secondary school if the debtor provides
    documentation of such expenses and a detailed explanation of why
    such expenses are reasonable and necessary, and why such expenses
    are not already accounted for in the National Standards, Local
    Standards, or Other Necessary Expenses referred to in subclause
    (I).
      (V) In addition, the debtor's monthly expenses may include an
    allowance for housing and utilities, in excess of the allowance
    specified by the Local Standards for housing and utilities issued
    by the Internal Revenue Service, based on the actual expenses for
    home energy costs if the debtor provides documentation of such
    actual expenses and demonstrates that such actual expenses are
    reasonable and necessary.
      (iii) The debtor's average monthly payments on account of secured
    debts shall be calculated as the sum of - 
        (I) the total of all amounts scheduled as contractually due to
      secured creditors in each month of the 60 months following the
      date of the filing of the petition; and
        (II) any additional payments to secured creditors necessary for
      the debtor, in filing a plan under chapter 13 of this title, to
      maintain possession of the debtor's primary residence, motor
      vehicle, or other property necessary for the support of the
      debtor and the debtor's dependents, that serves as collateral for
      secured debts;

    divided by 60.
      (iv) The debtor's expenses for payment of all priority claims
    (including priority child support and alimony claims) shall be
    calculated as the total amount of debts entitled to priority,
    divided by 60.
      (B)(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 debtor'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 nonpriority unsecured claims, or
      $6,000, whichever is greater; or
        (II) $10,000.

      (C) As part of the schedule of current income and expenditures
    required under section 521, the debtor shall include a statement of
    the debtor's current monthly income, and the calculations that
    determine whether a presumption arises under subparagraph (A)(i),
    that show how each such amount is calculated.
      (D) Subparagraphs (A) through (C) shall not apply, and the court
    may not dismiss or convert a case based on any form of means
    testing - 
        (i) if the debtor is a disabled veteran (as defined in section
      3741(1) of title 38), and the indebtedness occurred primarily
      during a period during which he or she was - 
          (I) on active duty (as defined in section 101(d)(1) of title
        10); or
          (II) performing a homeland defense activity (as defined in
        section 901(1) of title 32); or

        (ii) with respect to the debtor, while the debtor is - 
          (I) on, and during the 540-day period beginning immediately
        after the debtor is released from, a period of active duty (as
        defined in section 101(d)(1) of title 10) of not less than 90
        days; or
          (II) performing, and during the 540-day period beginning
        immediately after the debtor is no longer performing, a
        homeland defense activity (as defined in section 901(1) of
        title 32) performed for a period of not less than 90 days;

      if after September 11, 2001, the debtor while a member of a
      reserve component of the Armed Forces or a member of the National
      Guard, was called to such active duty or performed such homeland
      defense activity.
      (3) In considering under paragraph (1) whether the granting of
    relief would be an abuse of the provisions of this chapter in a
    case in which the presumption in paragraph (2)(A)(i) does not arise
    or is rebutted, the court shall consider - 
        (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.

      (4)(A) The court, on its own initiative or on the motion of a
    party in interest, in accordance with the procedures described in
    rule 9011 of the Federal Rules of Bankruptcy Procedure, may order
    the attorney for the debtor to reimburse the trustee for all
    reasonable costs in prosecuting a motion filed under section
    707(b), including reasonable attorneys' fees, if - 
        (i) a trustee files a motion for dismissal or conversion under
      this subsection; and
        (ii) the court - 
          (I) grants such motion; and
          (II) finds that the action of the attorney for the debtor in
        filing a case under this chapter violated rule 9011 of the
        Federal Rules of Bankruptcy Procedure.

      (B) If the court finds that the attorney for the debtor violated
    rule 9011 of the Federal Rules of Bankruptcy Procedure, the court,
    on its own initiative or on the motion of a party in interest, in
    accordance with such procedures, may order - 
        (i) the assessment of an appropriate civil penalty against the
      attorney for the debtor; and
        (ii) the payment of such civil penalty to the trustee, the
      United States trustee (or the bankruptcy administrator, if any).

      (C) The signature of an attorney on a petition, pleading, or
    written motion shall constitute a certification that the attorney
    has - 
        (i) performed a reasonable investigation into the circumstances
      that gave rise to the petition, pleading, or written motion; and
        (ii) determined that the petition, pleading, or written motion -
       
          (I) is well grounded in fact; and
          (II) is warranted by existing law or a good faith argument
        for the extension, modification, or reversal of existing law
        and does not constitute an abuse under paragraph (1).

      (D) The signature of an attorney on the petition shall constitute
    a certification that the attorney has no knowledge after an inquiry
    that the information in the schedules filed with such petition is
    incorrect.
      (5)(A) Except as provided in subparagraph (B) and subject to
    paragraph (6), the court, on its own initiative or on the motion of
    a party in interest, in accordance with the procedures described in
    rule 9011 of the Federal Rules of Bankruptcy Procedure, may award a
    debtor all reasonable costs (including reasonable attorneys' fees)
    in contesting a motion filed by a party in interest (other than a
    trustee or United States trustee (or bankruptcy administrator, if
    any)) under this subsection if - 
        (i) the court does not grant the motion; and
        (ii) the court finds that - 
          (I) the position of the party that filed the motion violated
        rule 9011 of the Federal Rules of Bankruptcy Procedure; or
          (II) the attorney (if any) who filed the motion did not
        comply with the requirements of clauses (i) and (ii) of
        paragraph (4)(C), and the motion was made solely for the
        purpose of coercing a debtor into waiving a right guaranteed to
        the debtor under this title.

      (B) A small business that has a claim of an aggregate amount less
    than $1,000 shall not be subject to subparagraph (A)(ii)(I).
      (C) For purposes of this paragraph - 
        (i) the term "small business" means an unincorporated business,
      partnership, corporation, association, or organization that - 
          (I) has fewer than 25 full-time employees as determined on
        the date on which the motion is filed; and
          (II) is engaged in commercial or business activity; and

        (ii) the number of employees of a wholly owned subsidiary of a
      corporation includes the employees of - 
          (I) a parent corporation; and
          (II) any other subsidiary corporation of the parent
        corporation.

      (6) Only the judge or United States trustee (or bankruptcy
    administrator, if any) may file a motion under section 707(b), if
    the current monthly income of the debtor, or in a joint case, the
    debtor and the debtor's spouse, as of the date of the order for
    relief, when multiplied by 12, is equal to or 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;
        (B) 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
        (C) 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.

      (7)(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 and
      apart, 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.

      (c)(1) In this subsection - 
        (A) the term "crime of violence" has the meaning given such
      term in section 16 of title 18; and
        (B) the term "drug trafficking crime" has the meaning given
      such term in section 924(c)(2) of title 18.

      (2) Except as provided in paragraph (3), after notice and a
    hearing, the court, on a motion by the victim of a crime of
    violence or a drug trafficking crime, may when it is in the best
    interest of the victim dismiss a voluntary case filed under this
    chapter by a debtor who is an individual if such individual was
    convicted of such crime.
      (3) The court may not dismiss a case under paragraph (2) if the
    debtor establishes by a preponderance of the evidence that the
    filing of a case under this chapter is necessary to satisfy a claim
    for a domestic support obligation.