Judith Gail Edwards

UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF NORTH CAROLINA
RALEIGH DIVISION
IN RE:
JUDITH GAIL EDWARDS, 	CASE NUMBER: 09-09250-8-JRL
CHAPTER 7
DEBTOR.
______________________________________________________________________________
ORDER DENYING MOTION TO DISMISS FOR ABUSE
This matter is before the court on the Bankruptcy Administrator’s motion to dismiss the
chapter 7 proceeding pursuant to 11 U.S.C. § 707(b)(1). A hearing on this matter was held on
March 9, 2010, in Raleigh, North Carolina.
The debtor filed for relief under chapter 7 of the Bankruptcy Code on October 23, 2009.
Section 707(b)(1) authorizes the court to dismiss a case filed by an individual debtor whose
debts are primarily consumer debts where it is found that granting relief would be an abuse.
Abuse for an above-median debtor is determined by a series of calculations under 11 U.S.C. §
707(b)(2). First, the debtor’s monthly expenses are subtracted from her total monthly income.
After deducting expenses, the remaining balance is multiplied by 60. If the balance, multiplied
by 60, is either (1) greater or equal to $6,575.00 or 25 percent of the nonpriority unsecured debt,
whichever is greater; or (2) greater or equal to $10, 950.00, then a presumption of abuse exists. §
707(b)(2)(A)(i)(I)-(II). Here, the debtor acknowledges that abuse is presumed. Although the
SO ORDERED.
SIGNED this 17 day of March, 2010.
________________________________________
J. Rich Leonard
United States Bankruptcy Judge
____________________________________________________________
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1 Although the debtor claimed $6,000.00 of special expense deductions on her Form
B22A she did not meet the statutory requirements for establishing them. Thus a hearing was
necessary.
2
debtor’s response to the trustee’s motion does not raise the defense of special circumstances, the
court finds that this is a case where special circumstances exist.1
Pursuant to 11 U.S.C. § 707(b)(2)(B)(i), the presumption of abuse may be rebutted by
demonstrating special circumstances which justify additional expenses or adjustments of current
monthly income. Any number of extra costs may constitute a finding of special circumstances,
“[i]ndeed any legitimate expense that is out of the ordinary for an average family. . .could be
considered.” 6 Collier on Bankruptcy ¶ 707.05[2][d] (15th ed). To make a showing of special
circumstances the debtor must: (1) create itemized documentation of each expense or adjustment
to income; (2) provide an explanation for why such expense is reasonable and necessary; and (3)
affirm under oath the accuracy of the documentation. § 707(b)(2)(B)(ii)-(iii). Even when the
debtor has shown special circumstances, the presumption of abuse remains intact unless the
adjustments to expenses brings the debtor’s available income below the amount triggering the
presumption. § 707(b)(2)(B)(iv).
At the hearing, Sandra Edwards Cary, the debtor’s sister, testified on the debtor’s behalf.
On April 18, 2009, the debtor suffered a massive brain stem stroke, leaving the debtor totally
disabled. Due to this serious medical condition, the debtor is unable to live without constant
medical care. The debtor receives monthly income from three sources: social security disability
in the approximate amount of $1,803.00, retirement disability from the State of South Carolina in
the approximate amount of $1,376.00, and private disability from Aetna in the approximate
amount of $250.00. Ms. Cary provided the requisite itemized documentation and testified to
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3
such. The documentation shows that the debtor’s monthly income is consumed by the costs of
assisted living, medications, insurance, doctors’ appointments, and other medical supplies.
These expenses are not only reasonable but are medically necessary to sustain the debtor’s life.
The prognosis is that the debtor will remain in her present state for the remainder of her days.
The court finds that the debtor has not only shown a situation of special circumstances,
but has sufficiently rebutted the presumption of abuse. Furthermore, the court finds that under
the Code, a hearing on special circumstances may not be necessary in every case. The debtor is
only required to attest under oath to the accuracy of the information provided. 11 U.S.C.
§ 707(b)(2)(B)(iii). This can be accomplished by the filing of an affidavit. The “debtor may
make such circumstances known to the United States trustee [or Bankruptcy Administrator] . . .
in hopes that a decision will be made that no dismissal motion should be filed.” 6 Collier on
Bankruptcy ¶ 707.05[2][d] (15th ed). Families, like the debtor’s, need not be routinely brought
into court and made to undergo questioning about emotionally sensitive subjects if they can
otherwise meet the statutory requirements for demonstrating special circumstances.
Based on the foregoing, the motion to dismiss is DENIED.
END OF DOCUMENT
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