I was sent a letter stating that there is a presumption of abuse and that my creditors can file for a dismissal. It also says that I can rebut the alleged presumption of abuse. How is that done and do I have to file that rebuttal on pleading or is there a form I must use?
Chapter 7 Bankruptcy Attorney
It means that you have too much equity or have too much income to file a chapter 7. get an attorney and convert the case to a 13. You can't overcome the presumption unless there are facts developed to show that the numbers should be ignored. You will not be able to do this unless you state the reason for the presumption in your question and why you think the law that arises should not apply to your case.
Disclaimer: This answer does not constitute legal advice. I am admitted in the States of New York, New Jersey and Massachusetts only and make no attempt to opine on matters of law that are not relevant to those three States. This advice is based on general principles of law that may or may not relate to your specific situation. Facts and laws change and these possible changes will affect the advice provided here. Consult an attorney in your locale before you act on any of this advice. You should not rely on this advice alone and nothing in these communications creates an attorney client relationship.
It is important for the debtor to cooperate with the trustee and to provide any financial records or documents that the trustee requests. Within 10 days of the meeting of creditors meeting, the U.S. trustee will report to the court whether the case should be presumed to be an abuse under the means test described in 11 U.S.C. § 704(b).
Presumption of abuse is automatic for debtors with above median income if they have enough projected disposable income to be able to pay general unsecured creditors over certain thresholds.
You need to discuss this with your bankruptcy attorney.
The information presented here is general in nature and is not intended, nor should be construed, as legal advice. This posting does not create any attorney-client relationship with the author (who is only admitted to practice law in the State of California). For specific advice about your particular situation, consult your own attorney.
Chapter 7 Bankruptcy Attorney
The burden of proving a debtor is not abusing the bankruptcy laws is shifted to the debtor usually when the petition, schedules, and means test indicate there is sufficient disposable income to fund a feasible Chapter 13 Plan. It could be for other reasons but that is the most common. Many times the means test, which looks backwards 6 months, is not an accurate indicator of future disposable income. In Riverside, there is a forward looking approach but the debtor must provide credible evidence that the disposable income looking forward will not be sufficient to fund a feasible plan. Disposable income, feasible plan, and presumption of abuse, have specific meaning in Bankruptcy court. The Local and Federal Bankruptcy Procedure Rules are specific on how to present a rebuttal. The risk of having the bankruptcy dismissed for failure to comply should motivate a visit to a bankruptcy attorney.