Matter of Cord, 85-04548-3.

• Decision Date: 31 July 1986
• Docket Number: No. 85-04548-3.,85-04548-3.
• Citation: 68 BR 5
• Court: U.S. Bankruptcy Court — Western District of Missouri
• Parties: In the Matter of Mary Kathleen CORD, Debtor.

68 B.R. 5 (1986)

In the Matter of Mary Kathleen CORD, Debtor.

No. 85-04548-3.

United States Bankruptcy Court, W.D. Missouri, W.D.

July 31, 1986.

Stuart D. Wieland, Kansas City, Mo., for debtor.

ORDER DISMISSING CHAPTER 7 CASE AS "A SUBSTANTIAL ABUSE" OF THE PROVISIONS OF CHAPTER 7 UNLESS THE CASE IS CONVERTED TO CHAPTER 13 WITHIN 10 DAYS OF THE FILLING OF THIS ORDER

DENNIS J. STEWART, Chief Judge.

In her initial schedules, filed with the court on February 26, 1986, the debtor scheduled her monthly income as $1,333.00 and her monthly expenses as $580.00. The difference of $753.00, if multiplied times the 60 months, would have paid half or more of the scheduled unsecured debt, $8,120.11.

In a hearing subsequently held by the court on June 17, 1986, to determine the issue of whether this case constituted a "substantial abuse" of the provisions of chapter 7, the debtor testified that her monthly expenses had increased since the date of filing because her roommate had moved out of their apartment, thus doubling her rent and her utility expenses,¹ and because she expended a minimum of $60.00 per month to defray her grandmother's necessary expenses.² Still, the court found orally at the conclusion of the hearing that an excess was available from which a significant portion of the unsecured debt might be paid.³ Therefore, the court took the issue of "substantial abuse" under advisement for ten days during which the debtor had the option of converting the chapter 7 proceedings to chapter 13 proceedings. The debtor, however, elected not to convert these proceedings to chapter 13 proceedings, but rather submitted a second amended budget, on the basis of which she predicated a new claim of inability to pay all or part of the scheduled unsecured debt. Even if this court says nothing, however, of the continually shifting factual contentions of the debtor, the most recent statement clearly shows the availability to debtor of substantial amounts of monthly income which are more than sufficient to pay a substantial portion of the existing unsecured debt.⁴

Under such circumstances, it makes little sense for the protection of the bankruptcy laws to be extended to the debtor. When debts are discharged simply because the debtors do not wish to pay for them, the bankruptcy laws have the effect of discouraging responsibility instead of encouraging it. In this court's prior decisions, it has been observed that the bankruptcy laws have the lofty purpose of granting responsible persons needed relief from overburdening debt — a relief which may be necessary to the continued effectiveness of our economic democracy. See, e.g., Matter of Burstein-Applebee Co., 63 B.R. 1011 (Bkrtcy.W.D.Mo.1986), to the following pertinent effect;

"It is through the process of asset collection that, in the final analysis, the bankruptcy courts are able to assure the honesty of debtors. Otherwise, bankruptcy becomes the monopoly of those who would abuse its available processess to escape their lawful debts, unjustly and without genuine necessity. As a means of giving a new economic life to those whose good faith efforts have been unavailing, the bankruptcy process would gradually but rapidly fall into desuetude, thus deleting from the lifeline of our constitution the engine which gave our political democracy its necessary economic impetus. For it is clear that if a citizen has the right to only one economic chance — if one significant economic failure means that he must spend the remainder of his existence in servitude, despite the fact that his industry and creativity might otherwise have bestowed benefits upon himself and society—then the predicate upon which our democratic institutions exist would stand in grave peril."

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