This paper discusses judicial discretion to find abuse in Chapter 13 bankruptcy cases.
Under the Bankruptcy Abuse Prevention and Consumer Protection Act ("BAPCPA") of 2005, the court’s discretion to find abuse was replaced with a mathematical formula under § 707(b). The new § 707(b)(2)(A) instructs the court to presume that abuse exists if the debtor passes (or, depending upon one’s point of view, fails to pass) a means test. The progression of this issue and the shift in case law away from judicial discretion has been marked by numerous cases, but most notable is the 2006 case In re Hardacre, 338 B.R. 718 (Bankr. N.D. Tex. 2006). This paper discusses In re Hardacre in detail, and examines other emerging issues in case law since the enactment of BAPCPA.
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