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Follow on Google News | Court Refuses To Dismiss Chapter 7 Bankruptcy Because Debtor Found High-Paying Job After Filing DateYou’re unemployed. You’re poor. You are stressed-out by debts and debt collectors. So, you file Chapter 7 bankruptcy. Then, shortly after you file bankruptcy you find a job. What happens now?
By: Bankruptcy Credit Cards The question was discussed in a recent Florida bankruptcy court decision. A United States Trustee argued that granting a Chapter 7 discharge would be an abuse of Chapter 7 where the debtor was unemployed on the petition date, but thereafter obtained employment that enabled him, post-petition, to deposit more than $1,000 cash flow in a 401k account. The U.S. Trustee argued that the debtor’s new job enabled him to pay at least $668 per month to creditors if his Chapter 7 were converted to Chapter 13. Is it an abuse to let this debtor keep all his new income and pay no debts because he filed Chapter 7 bankruptcy? The bankruptcy court did not dismiss the case. The court said that the post-petition job and ability to pay creditors is relevant to an abuse analysis, but that the U.S. Trustee most show more than just the debtor’s mathematical ability to pay debt from his new job. The court noted, among other things, that this debtor did not improve his living standards after his employment and that he has a serious medical condition that will limit his working life. The bankruptcy was a result of an unexpected, sudden job joss. The court held that it must consider all circumstances and not just the "mere mathematical ability to fund a Chapter 13 plan." In re Lavin, Case No. 08-2708, Tampa Division. For more information visit http://www.bankrupcy- # # # Bankruptcy and Credit Cards go hand in hand. We distribute information about each through a network of blogs, websites, newsletters, and press releases. End
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