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Another way to determine if there is a presumption of abuse is to calculate just the net monthly amount: • If the net monthly amount is less than $100 then no presumption exists. • If the net monthly amount is between $100 and $166.66 then a presumption of abuse exists if the amount would be sufficient to pay, over 60 months, at least 25% of the debtor's non-priority, unsecured, debt. • If the net monthly amount is $167.67 or more then there is a presumption of abuse. When there is a presumption of abuse then the debtor cannot file a Chapter 7 case unless they can rebut the presumption by furnishing evidence that demonstrates "special circumstances". The court may still find abuse even where there is no presumption or where it has been successfully rebutted. Under Sect. 707(b)(3) the court may consider the "totality of the circumstances" of the debtor's financial circumstances or consider whether the debtor filed the petition in "bad faith". Anytime the debtor's income exceeds the state median family income then careful and complex calculations must be done. |
The Means Test
Part 4 of 4