Presumption of Abuse in a Nebraska Bankruptcy Case

August 1, 2019 | By Steffens Law Office
Presumption of Abuse in a Nebraska Bankruptcy Case

When a Chapter 7 case is filed by an ineligible person, under bankruptcy terminology that person is said to have abused the Chapter 7 laws. 

Chapter 7 bankruptcy, also called a liquidation bankruptcy, involves selling nonexempt property to repay creditors and forgiving the remaining debt. There is a means testing process that looks at income in relation to debt payments to see if a person's debt is considered manageable.

When a person whose current monthly disposable income is such that he or she can afford to make monthly payments to unsecured creditors in the required amount, a presumption of abuse is said to arise in the case.  If a presumption of abuse arises in a case, the case will be dismissed or converted to Chapter 13 unless the person filing the case can prove the existence of special circumstances, such as a serious medical condition.

Avoiding the Presumption of Abuse

Retaining the services of an experienced bankruptcy attorney is the best way to avoid the presumption of abuse in your Nebraska bankruptcy case. To learn more about Chapter 7 bankruptcy requirements, call Steffens Law Office today to schedule a free, no-obligation initial consultation.