Miller v. United States Trustee (In re Miller)

Citation:
Miller v. U.S. Trustee (In re Miller), BAP No. WY-14-002 (October 8, 2014)
Tag(s):
Ruling:
For purposes of Chapter 7 eligibility, the means test under 11 USC 707(b) and 101(10A) requires calculation of all income received by a debtor in the six month look back period, rather than just income both earned and received during the six month look back period. The 10th Circuit BAP affirmed the bankruptcy court's ruling dismissing the debtor's Chapter 7 case based on a presumption of abuse because the debtor's income under the means test exceeded the median income in Wyoming for his family size. The debtor argued that only income both earned and received in the sixth month look back period should be counted for purposes of the Chapter 7 means test. The BAP, on an issue of apparent first impression, reviewed the plain language of 11 USC 101(10A) and 707(b), as well as the legislative history. The BAP concluded that notwithstanding Congress' choice to not use the word "received" in the statute, the plain language in 101(10A) of the phrase "income[] derived during the 6-month period" meant "received," rather than "earned and received."
Procedural context:
Debtor appealed to the 10th Circuit BAP the bankruptcy court's judgment granting the U.S. Trustee's motion to dismiss debtor's Chapter 7 bankruptcy pursuant to 11 USC 707(b) as an abuse of the bankruptcy system.
Facts:
Debtor, residing in Wyoming, filed bankruptcy under Chapter 7 reporting annual income on his Form B22A Chapter 7 means test form of $49,721 for a family of three, an amount well under the $73,688 median income for a family three in Wyoming. Subsequently, debtor filed an amended B22A form, claiming a family size of four and an annual income of $73,338, approximately $300 below the median income in Wyoming for a family of three, and over $5,000 less than the median income for a family of four. The U.S. Trustee contested debtor's calculations, asserting that debtor improperly excluded a paycheck received in the six month look back period for work performed outside the look back period. Inclusion of the payment placed debtor's income above the median amounts for Wyoming, and would have resulted in payments to creditors in a Chapter 13 case of approximately $42,000, or between 50%-75% of creditor claims. Based on the calculation, the U.S. Trustee filed a motion to dismiss debtor's case pursuant to 11 USC 707(b) as a presumed abuse of the bankruptcy system.
Judge(s):
Nugent, Karlin, Somers

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