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Bankruptcy

 

Introduction to the Means Test and Dismissals or Conversions for Abuse

Learn about the rules governing dismissal of a chapter 7 case for abuse, along with the presumption of abuse under the means test.

Transcript

Section 707(b) of the Bankruptcy Code applies only to individual debtors. Under that provision, the bankruptcy court may dismiss a chapter 7 case if granting bankruptcy relief would be an abuse of chapter 7's provisions. Alternatively, the court may convert the case to chapter 11 or 13, provided the debtor consents and is eligible to be a debtor under chapter 11 or 13.

There are, of course, multiple bases upon which the bankruptcy court can find abuse. But the Bankruptcy Code instructs the...