Case Summary:
The Debtors were housemates and filed separate Chapter 7 petitions. Together, their incomes exceeded the median income; separately, their incomes were below the median income. The U.S. Trustee filed a motion to dismiss pursuant to § 707(b)(2) and (3). The Court denied the U.S. Trustee’s motions without prejudice. The Court found that the U.S. Trustee had not carried its burden of demonstrating that some or all of each debtor’s income was used to pay household expenses of the other debtor and should have been included as “income” for purposes of the means test. The Court concluded that ability to pay, standing alone, is not sufficient to serve as the basis of a finding of abuse under the totality of the circumstances inquiry of § 707(b)(3). The Court also found that the U.S. Trustee had not carried its burden to demonstrate that the totality of the circumstances supported a finding of abuse pursuant to § 707(b)(3).

Statute/Rule References:
11 U.S.C. § 101(10)(a)
11 U.S.C. § 101(10)(b)
11 U.S.C. § 101(15)
11 U.S.C. § 707(b)(1)
11 U.S.C. § 707(2)
11 U.S.C. § 707(3)
11 U.S.C. § 707(7)(a)

Key Terms:
Ability to Pay
Abuse
Bad Faith
Income
Means Test
Motion to Dismiss
Substantial Abuse