In re Hudson

• Citation: 56 BR 415
• Decision Date: 10 December 1985
• Docket Number: Bankruptcy No. 85-00236.
• Parties: In re Jonathan HUDSON and Joyce Ann Hudson, Debtors.
• Court: United States Bankruptcy Courts. Sixth Circuit. U.S. Bankruptcy Court — Northern District of Ohio

56 B.R. 415 (1985)

In re Jonathan HUDSON and Joyce Ann Hudson, Debtors.

Bankruptcy No. 85-00236.

United States Bankruptcy Court, N.D. Ohio, W.D.

December 10, 1985.

L. Douglass McCrury, Toledo, Ohio, for debtors.

John J. Hunter, Toledo, Ohio, trustee.

MEMORANDUM OPINION AND ORDER

RICHARD L. SPEER, Bankruptcy Judge.

This cause comes before the Court for Determination of Dismissal pursuant to 11 U.S.C. Section 707(b). The Court has conducted a hearing on this matter, and has heard both the evidence and arguments of counsel. Subsequent to this hearing, the Debtors were Ordered to file an Amended Schedule of Current Income and Current Expenditures. The Court has reviewed that Amended Schedule, the arguments of counsel, and the entire record in this case. Based upon that review and for the following reasons the Court finds that this matter should be continued for further proceedings.

FACTS

The Court makes the following findings of fact:

I. The Debtors filed their voluntary Chapter 7 Petition with this Court on February 12, 1985. In the schedules which accompanied that Petition and the amendments which followed, they listed:

A. Secured obligations of Four Thousand Five Hundred Fifty and 24/100 Dollars ($4,550.24). These obligations are secured by two automobiles, a 1977 Plymouth and a 1979 Plymouth. They also list an obligation of Three Hundred Ninety-one and 57/100 Dollars ($391.57) in a share account. The nature of this obligation and/or account is unclear.

B. Unsecured obligations totaling Nine Thousand Nine Hundred Seven and 62/100 Dollars ($9,907.62). The majority of these obligations are the result of consumer purchases, none of which exceed Five Hundred Seventy-six and 45/100 Dollars ($576.45) in amount. The Debtors also have a deficiency debt of Six Hundred Eighty-nine and 33/100 Dollars ($689.33) which is owed subsequent to the repossession of another automobile. In addition, the Debtors have a Two Thousand Three Hundred Eighty and 13/100 Dollars ($2,380.13) obligation to a utility company for service rendered prior to the filing of the Petition.

C. Priority debts of Four Hundred Twenty and 29/100 Dollars ($420.29). This obligation is owed to the United States on their 1983 income tax obligations.

II. The Debtors do not claim any ownership in real estate. Their present residence is rented.

III. The Debtor-husband is employed as an assembler by the General Motors Corp. In the two years prior to the filing of the Petition, he had an income of approximately Thirty-one Thousand and no/100 Dollars ($31,000.00) in each of these years. At the time of this hearing he was on disability leave and was receiving disability pay in the amount of Nine Hundred Fifty-one and no/100 Dollars ($951.00) per month. His normal take home pay is One Thousand Six Hundred Thirty-eight and no/100 Dollars ($1,638.00). At the present time it is unknown whether or not he has returned to work.

IV. The Debtor-wife is employed as a teachers aid by the Toledo Board of Education. In that capacity she only works nine months out of the year. In 1983 she had an income of approximately Six Thousand and no/100 Dollars ($6,000.00). In 1984 she had an income of approximately Five Thousand and no/100 Dollars ($5,000.00). During the present year it appears that her monthly income, if averaged over a twelve month period, would be approximately Four Hundred Twenty-eight and 40/100 Dollars ($428.40).

V. The Debtors have three dependent children. They have two sons, ages seventeen and fourteen. Their daughter is ten years of age.

VI. The Debtors have twice amended their Schedule of Current Income and Current Expenditures. In the most recent amendment they list the following items: (all entries are per month figures)

                EXPENDITURES
                Rent                     $  325.00
                Electricity                  60.00
                Water                        35.00
                Heat                     $  200.00
                Telephone                    30.00
                Garbage                      15.00
                Food                        500.00
                Clothing                    100.00
                Newspapers (and other        10.00
                  publications)
                Medical                     135.00
                Transportation              146.00
                Insurance                    75.00
                Haircuts                     40.00
                Tobacco                      50.00
                Churches                     25.00
                Tuition                      69.00
                Reaffirmation of secured    189.00
                  debts on vehicles      _________
                TOTAL                    $2,004.00
                INCOME
                Debtor-Husband           $1,638.00
                Debtor-Wife                 571.20
                Business operations          -0-
                                         _________
                TOTAL:                   $2,209.00
                Adjustment (See Note        142.80
                                         _________
                  A Below
                ADJUSTED TOTAL:          $2,066.40
                

A. It should be noted that the total income figure incorporates the wife\'s income during the months she is employed. When averaged over twelve months her average monthly income would be approximately Four Hundred Twenty-eight and 40/100 Dollars ($428.40) per month. Accordingly, the Court will consider the Debtors\'s monthly income to be that shown as the adjusted income.

B. It should also be noted that the Court\'s listing of the Debtor\'s expenses conflicts with that which is listed on the actual schedule filed by the Debtors. The conflict results from a reduction in the amount of monthly expenditures listed on the actual schedules by One Hundred Thirty-two and no/100 Dollars ($132.00). This reduction was made due to the fact that since the filing of the Amended Schedule the Debtors appear to have discontinued their cable television service (at $80.00 per month), and have chosen not to enter into a reaffirmation agreement with another creditor (at $52.00 per month).

C. In addition to the Amended Schedule, the Debtors filed an explanation of the figures which appear on the schedule. Many of the figures in the explanation conflict with the figures listed in the schedules. Specifically:

1. The utilities expense does not include amounts which will be adequate to pay the arrearages which have accrued since the filing of the Petition. The arrearage appears to be $873.00.

2. The food receipts for the month of June 1985 totalled $608.77 (as contrasted with the $500.00 per month figure listed on the schedule).

3. The medical expenditure includes payments for the wife\'s continuing dermatological condition, as well as other expenses not covered by the Debtors\' medical insurance (there are no specific expenses listed).

4. The transportation expenses are explained as being primarily for fuel and oil. Reference is made to expenditures for anticipated repairs and replacement of their current vehicles. It is unclear whether or not such items have been included in the amount listed on the schedule. It is also unclear whether the transportation expense includes an allowance for payment of a repair bill which has arisen subsequent to the filing of the petition. That bill is in the amount of $400.00.

5. The haircut expense, as it appears in the explanation, is listed at $90.00 per month (as contrasted to the $40.00 per month listed on the schedule). This $90.00 per month expense allows for a $15.00 haircut for each of the two female members of the family every two weeks ($60.00 per month), and a $5.00 haircut for each of the three male members of the family every two weeks ($30.00 per month).

6. The tobacco expense is explained as being $100.00 per month (as compared to the $50.00 per month listed on the schedule). As explained, this $100.00 per month expenditure allows for the husband\'s two pack per day habit plus a pipe, and for the wife\'s one and one-half pack per day habit.

7. The tuition expense is to allow the daughter to attend a privately owned school for children with mild disabilities.

8. There is included in the explanation a $67.00 per month expense for the rental of a kitchen stove. This expense does not appear on the schedule.

D. It should be further noted that if the figures on the explanation are correct, then the Debtors\' total monthly expenses would be $2,289.07 plus payments to make up the utility arrearages and the automobile repair bill.

VII. On his statement of Financial Affairs the Debtor-husband indicated that he had filed a Chapter 7 Petition with this Court in 1968 and that he received a discharge in that case. However, a review of the Court's records reflects that that Petition was actually filed in 1967. The review also reflects that the Debtor filed a Chapter 13 Petition with this Court on January 25, 1971. That case was subsequently dismissed on June 7, 1973. A further review of the record finds that on June 5, 1973, two days prior to the dismissal of his 1971 case, the Debtor filed a Chapter 7 Petition with this Court. A discharge was granted in that case on September 19, 1973. The 1971 and 1973 Petitions were not disclosed on the Statement of Financial Affairs which is filed in the case presently before the Court.

LAW

The provisions of 11 U.S.C. Section 707(b) state:

(b) After notice and a hearing, the court, on its own motion and not at the request or suggestion of any party in interest, may dismiss a case filed by an individual debtor under this chapter . . . whose debts are primarily consumer debts if it finds that the granting of relief would be a substantial abuse of the provisions of this chapter . . . There shall be a presumption in favor of granting the relief requested by the debtor.

Under this provision the Court may, on its own initiative, dismiss a consumer debtor's case if it finds that the granting of relief under Chapter 7 of Title 11 would be a substantial abuse of the provisions of Chapter 7. This provision also indicates that this section may only be exercised by the Court, and may not be employed by any other party-in-interest. There have been no other cases in this Court which have addressed this provision of Title 11.

I

The first question which must be resolved is the determination as to meaning of the...