In re Gaukler, Bankruptcy No. 86-06261.

• Citation: 63 BR 224
• Decision Date: 28 May 1986
• Docket Number: Bankruptcy No. 86-06261.
• Parties: In re David GAUKLER and Kathleen Gaukler, Debtors.
• Court: United States Bankruptcy Courts. Eighth Circuit. U.S. Bankruptcy Court — District of North Dakota

63 B.R. 224 (1986)

In re David GAUKLER and Kathleen Gaukler, Debtors.

Bankruptcy No. 86-06261.

United States Bankruptcy Court, D. North Dakota.

May 28, 1986.

William Kirschner, Fargo, N.D., for debtors.

Gary Cameron, Moorhead, Minn., Trustee.

William Westphal, U.S. Trustee.

ORDER

WILLIAM A. HILL, Bankruptcy Judge.

This matter is before the Court on its own Order to Show Cause issued sua sponte on April 21, 1986, directing the Debtors to appear and show cause why their Chapter 7 petition should not be dismissed pursuant to the substantial abuse provision of section 707(b) of the Bankruptcy Code.

A hearing was held on May 14, 1986, and the Debtor, David Gaukler, filed his Affidavit in response to the Order. An affidavit has also been filed by Douglas R. Horchak, Assistant Director of Church Administration for the Worldwide Church of God. Counsel for the Debtors also provided the Court with a brief.

This case came to the Court's attention after examination of the schedules indicating that from a monthly net income of $1,802.56 the Debtors had monthly expenditures of $2,372.47 including a contribution of $672.48 per month for religious contributions which, given their financial condition, seemed excessive.

From the affidavits submitted, the facts are as follows: The Debtors have four children all under the age of eight which reside with them. Since filing their bankruptcy, Mrs. Gaukler has lost her job. The families living expenses are by no means extravagant. Their schedules indicate that they are spending only $280.00 per month on food, which for a family of six, would in this Court's experience purchase little more than subsistence level provisions. Additionally, the Debtors have lost their home and are renting living quarters. They have also given back their automobile to the secured creditor. The Debtors have gone through credit counselling and have tightened their budget belt everywhere they can except for the matter of religious donations. The Debtors, are members of the Worldwide Church of God which Requires its members to donate ten percent (10%) of their income to the church as well as saving an additional ten percent (10%) for their personal use in paying the expenses of celebrating annual holy days and festivals. Every third and sixth year out of seven, members of the church are also required to donate a further ten percent (10%) for the support of widows, orphans and other needy persons. The Debtors' schedules reveal an unsecured debt of $4,900.00 stemming principally from credit card purchases. They also have secured debt of some $46,000.00, the bulk of which is due to a first and second mortgage on their home.

From the case law that has thus far developed, the following are the criteria against which the facts of a particular case are to be assessed in determining whether substantial abuse exists sufficient to mandate dismissal under section 707(b):

(1) whether the debtors have a likelihood of sufficient future income to fund a Chapter 13 plan which would pay a substantial portion of the unsecured claims;

(2) whether the debtors\' petition was filed as a consequence of illness, disability, unemployment or some other calamity;

(3) whether the schedules suggest the debtors incurred cash advances and consumer purchases in an excess of their ability to repay them;

(4) whether the debtors proposed family budget is excessive or extravagant;

(5) whether the

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