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    Robert and the team at Stiberman Law are truly exceptional. I was faced with the daunting task of navigating bankruptcy, and from the moment I contacted them, I knew I was in good hands Read More
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    Excellent Lawyer, friendly and on top of things and reliable and efficient. I had to go through bankruptcy twice and I trusted them every time. I had the best experience with Robert and Read More
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    I am very satisfied with the service that they offered us. They were very professional and kept us informed at all times. I was looking for a bankruptcy attorney nearby and fount Robert Read More
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  • Louisa P.starstarstarstarstar5.0
    Robert and the team at Stiberman Law are truly exceptional. I was faced with the daunting task of navigating bankruptcy, and from the moment I contacted them, I knew I was in good hands Read More
    May 21, 2024logo
  • Arlene S.starstarstarstarstar5.0
    Excellent Lawyer, friendly and on top of things and reliable and efficient. I had to go through bankruptcy twice and I trusted them every time. I had the best experience with Robert and Read More
    March 20, 2024logo
  • Gustavo S.starstarstarstarstar5.0
    I am very satisfied with the service that they offered us. They were very professional and kept us informed at all times. I was looking for a bankruptcy attorney nearby and fount Robert Read More
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  • Paul B.starstarstarstarstar5.0
    I would like to share the amazing experience I have had with this Law firm. I was on the verge of loosing my house because I had not paid my property taxes. I looked for a Bankruptcy at Read More
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    When I say this office was absolutely the best, I am not kidding! They have been absolutely phenomenal. Robert has been the best bankruptcy attorney. The whole team has always kept Read More
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    I was referred by a friend to this bankruptcy attorney. Mr. Stiberman and his staff was very courteous, knowledgeable and very caring towards my concerns. I am pleased with the outcom Read More
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    The process was relatively easy, I would recommend Stiberman Law to anyone who finds themselves in need of a bankruptcy attorney.
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    I have to say that I have had a great experience with Stiberman Law regarding a bankruptcy and they have been very informative and supportive. They have been very helpful and always ans Read More
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  • L.L.starstarstarstarstar5.0
    Excellent service. Great bankruptcy attorney and staff. Always informed me of what to expect. My Chapter 13 bankruptcy was smooth and the process was easy thanks to Robert and the Read More
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    Twelve years ago I was in need of legal representation stemming from the housing meltdown if 2008. Robert Stiberman and his staff handled the matter with complete professionalism and sp Read More
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    I was looking for a bankruptcy attorney in Miami, and I found Mr. Stiberman. He and his office were efficient, and they guided me through every step of the process. I am appreciative of Read More
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  • Carmen C.starstarstarstarstar5.0
    I am so grateful for Stiberman Law, P.A. In 2019 my husband and were faced with a very difficult decision file for Bankruptcy, unfortunately we weren’t able to pay for our credit Read More
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    Excellent work from this bankruptcy law firm! I was drowning in debt with my license suspended from a lawsuit I had and thought I would have to spend the rest of my life paying back deb Read More
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    The experience with this office has been great. No problems at all they have kept me straight to doing the right thing and feeling a breeze of peace and being debt free with my bankruptcy.
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    Very happy with Robert and his team. Thanks to them we were able to save our home. Very helpful and knowledgeable in bankruptcy. Best attorney.
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    I had a great experience, I just want thank Stiberman law and his team for a great experience also Ana for the help and explaining my case. Appreciate, thank you
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    Very good office with my bankruptcy. They have been amazing through this hard process. Very happy with Robert and his staff they are very nice and professional. Thank you stiberman!
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    Amazing work by Robert. They are really good with what they do, very attentive and knowledgeable. Customer service and professionalism are top, the lawyer has been great this whole t Read More
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Understanding the Presumption of Abuse in Bankruptcy

Introduction

Bankruptcy can be confusing and intimidating for many individuals facing financial difficulties. One aspect of bankruptcy that often raises questions is the concept of the “presumption of abuse.” In this article, we will explore the presumption of abuse in bankruptcy, what factors can trigger it, and how it can be overcome. We will also discuss the role of a bankruptcy attorney in guiding you through the process.

Understanding Bankruptcy

There are two primary types of personal bankruptcy in the United States: Chapter 7 and Chapter 13. Let’s briefly discuss each one.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy, also known as “liquidation” bankruptcy, allows individuals to discharge most of their unsecured debts, such as credit card debts, medical bills, and personal loans. In exchange, the bankruptcy trustee may sell non-exempt assets to pay off creditors.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy, sometimes called “wage earner’s” bankruptcy, enables individuals to reorganize their debts and create a repayment plan lasting three to five years. This type of bankruptcy is typically best for individuals with a regular income and valuable assets they wish to protect from liquidation.

The Presumption of Abuse

In the context of bankruptcy, the presumption of abuse is a legal mechanism designed to prevent individuals from abusing the bankruptcy system by filing for Chapter 7 bankruptcy when they can afford to repay at least a portion of their debts.

The Means Test

Debtors must undergo a means test to determine whether the presumption of abuse applies. The means test compares the debtor’s income and expenses to the state median income and IRS guidelines for necessary expenses. If the debtor’s income is below the median or they have little to no disposable income after accounting for necessary expenses, they can likely file for Chapter 7 bankruptcy without the presumption of abuse arising.

Income and Expense Analysis

If a debtor’s income exceeds the state median or they have significant disposable income, the court may further analyze their income and expenses to determine whether the presumption of abuse applies.

Significance of the Presumption of Abuse

If the presumption of abuse arises, the debtor may be ineligible for Chapter 7 bankruptcy and must either prove special circumstances that justify their Chapter 7 filing or consider other options, such as filing for Chapter 13 bankruptcy.

Factors that Trigger the Presumption of Abuse

Several factors can trigger the presumption of abuse in bankruptcy, including:

High Income

A debtor with a high income may be subject to the presumption of abuse, as the court may believe they have the means to repay their debts.

Excessive Expenses

Excessive expenses, especially those not necessary for the debtor’s well-being or the maintenance of their dependents, can also contribute to the presumption of abuse. This may include luxury items, lavish vacations, or expensive hobbies.

Luxury Items and Debts

Debts incurred for luxury items, such as high-end electronics, designer clothing, or luxury vehicles, can trigger the presumption of abuse. They may indicate that the debtor has not acted in good faith or has been living beyond their means.

Overcoming the Presumption of Abuse

In some cases, debtors can overcome the presumption of abuse by demonstrating one or more of the following:

Special Circumstances

If a debtor can prove that special circumstances exist, such as a medical condition or recent job loss, that justify their inability to repay their debts, they may be able to overcome the presumption of abuse and proceed with a Chapter 7 bankruptcy.

Filing for Chapter 13 Bankruptcy

If the presumption of abuse cannot be overcome, debtors may still be able to seek relief through Chapter 13 bankruptcy. This option allows them to repay a portion of their debts through a structured repayment plan over three to five years while retaining their assets.

Working with a Bankruptcy Attorney

Navigating the bankruptcy process and dealing with the presumption of abuse can be challenging for many individuals. Working with an experienced bankruptcy attorney can provide valuable guidance and help you make the best decisions for your financial situation.

Conclusion

The presumption of abuse in bankruptcy is a legal mechanism designed to prevent individuals from abusing the bankruptcy system by filing for Chapter 7 when they can afford to repay their debts. Factors that can trigger the presumption of abuse include high income, excessive expenses, and luxury debts. Overcoming the presumption of abuse may involve demonstrating special circumstances or considering alternative options, such as filing for Chapter 13 bankruptcy. Consulting with a bankruptcy attorney can provide valuable support throughout the process.

FAQs

1. What is the presumption of abuse in bankruptcy?

The presumption of abuse is a legal concept that prevents individuals from filing for Chapter 7 bankruptcy if they have the means to repay at least a portion of their debts.

2. How is the presumption of abuse determined?

The presumption of abuse is determined through the means test, which compares the debtor’s income and expenses to state median income and IRS guidelines for necessary expenses.

3. Can the presumption of abuse be overcome?

Yes, the presumption of abuse can be overcome by demonstrating special circumstances, such as a medical condition or recent job loss, or by filing for Chapter 13 bankruptcy instead.

4. What is the role of a bankruptcy attorney in dealing with the presumption of abuse?

A bankruptcy attorney can help individuals navigate the bankruptcy process, overcome the presumption of abuse, and ensure they make the best decisions for their financial situation.

5. How does Chapter 13 bankruptcy differ from Chapter 7 bankruptcy?

Chapter 13 bankruptcy allows individuals to reorganize their debts and create a repayment plan lasting three to five years. In contrast, Chapter 7 bankruptcy involves the discharge of most unsecured debts and the possible liquidation of non-exempt assets.

Personalized Bankruptcy Representation for Individuals in Florida

Robert Stiberman is a highly experienced bankruptcy attorney who specializes in representing individuals in Florida. With over 15 years of experience, he has helped numerous clients successfully navigate bankruptcy and emerge with a fresh financial start.

Robert understands that filing for bankruptcy can be a stressful and overwhelming process. That’s why he works closely with each of his clients to provide personalized guidance and representation every step of the way. He takes the time to listen to their concerns, explain their options, and develop a customized strategy to achieve their financial goals.

Whether his clients are facing overwhelming debt, foreclosure, or other financial challenges, Robert has the knowledge and expertise to help them find relief. He has successfully represented clients in a wide range of bankruptcy cases, including Chapter 7 and Chapter 13 bankruptcy.

Beyond his legal skills, Robert is known for his compassionate and supportive approach to his clients. He understands the emotional toll that financial difficulties can take on individuals and families, and he is committed to providing a compassionate and non-judgmental environment where clients feel comfortable discussing their concerns and asking questions.

If you’re struggling with debt and considering bankruptcy, don’t hesitate to contact Robert Stiberman for a consultation. With his extensive experience and personalized approach, he can help you take control of your finances and achieve a fresh financial start.

Written By:

Attorney Robert Stiberman

Robert is an experienced bankruptcy attorney adept at handling Chapter 7, 13, and 11 filings, with more than 15 years of experience in bankruptcy cases. Robert represents clients in both consumer and business bankruptcy ... Read More

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