Kenneth N. Whitehurst, III, Esq., AUST, VSB No. 48919

Cecelia Ann Weschler, Esq., VSB No. 28245

Nicholas S. Herron, Esq., NJSB No. 03007-2008, PASB No. 208988

Office of the U.S. Trustee

200 Granby Street, Room 625

Norfolk, VA 23510

(757) 441-6012

UNITED STATES BANKRUPTCY COURT

EASTERN DISTRICT OF VIRGINIA

Norfolk Division 

In re: 

Michael A. James

Cassie P. James, 

 Debtors.

 19-70674-FJS

Chapter 7

MOTION TO DISMISS UNDER 11 U.S.C. §§ 707(b)(2) and 707(b)(3)

John P. Fitzgerald, III, Acting United States Trustee for Region Four, by counsel, files 

this Motion to Dismiss under section 707(b)(2) and 707(b)(3) (Motion) and in support states as

follows:

JURISDICTION

1. The Court has jurisdiction pursuant to 28 U.S.C. §§ 1334(b) and 157(a) and the 

Order of Reference of the U.S. District Court for the Eastern District of Virginia dated August 

15, 1984. This is a core proceeding pursuant to 28 U.S.C. §§ 157(b)(2). Venue of this proceeding 

is proper under 28 U.S.C. §§ 1408 and 1409.

FACTS

2. On February 22, 2019, the debtors filed a voluntary chapter 7 petition under Title 

11 of the United States Code (Bankruptcy Code). 

3. The debtors’ debts are primarily consumer debts. See Docket Entry No. 1, 

Voluntary Pet., Part 6, Line 16a. 

4. The debtors disclosed $252,342.17 in total nonpriority unsecured debt. See

Docket Entry No. 13, Schedules E/F, Part 4, Line 6j. 

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5. The debtors claimed a household size of two. See Docket Entry No. 16, Means 

Test, Line 13.

6. The debtors reported $6,487 in current monthly income. See Docket Entry No. 16, 

Means Test, Line 12a.

7. The debtors’ annual income exceeds the applicable median income for a 

household size of two. See Docket Entry No. 16, Means Test, Line 12b, 13. 

8. Because the debtors are above-median income debtors, Official Form 122A-2 

(Means Test Part 2) is required to be completed to determine if a presumption of abuse arises. 

9. The debtors claimed $5,255.40 in monthly deductions. See Docket Entry No. 16, 

Means Test Part 2, Line 38. 

10. According to the debtors’ Means Test Part 2, the presumption of abuse arises. See

Docket Item No. 16, Means Test Part 2, Line 40.

11. The Means Test Part 4 allows the debtors to declare special circumstances to 

rebut the presumption of abuse. The debtors did not assert any special circumstances to rebut the 

presumption of abuse. See Docket Entry No. 16, Means Test 4, Line 43.

12. On April 15, 2019, the U.S. Trustee filed a statement of presumed abuse. See 

Docket Entry No. 25.

13. On March 18, 2019, the debtors filed a motion to convert this case to one under 

chapter 13. A hearing on the debtors’ motion is scheduled for May 29, 2019. See Docket Entry 

Nos. 19, 28. 

14. The deadline for the U.S. Trustee to file a motion to dismiss is May 15, 2019.

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LEGAL ARGUMENT

15. Dismissal of this case is required because the presumption of abuse arises and has 

not been rebutted. Additionally, under the totality of circumstances the debtors have an ability to 

repay creditors to warrant dismissal under section 707(b)(3)(B). 

16. Where debts are primarily consumer debts, the court may, after notice and a 

hearing, dismiss a chapter 7 case “if it finds that the granting of relief would be an abuse of the 

provisions of [Chapter 7].” 11 U.S.C. § 707(b)(1). In re Wenzel, No. 14-32432, 2015 WL 

1087409, at *2 (Bankr. N.D.Ohio March 9, 2015).

17. A chapter 7 case is presumptively abusive if the debtor, whose income exceeds 

the applicable median family income, reports that his or her disposable income, as calculated 

under the means test, exceeds certain statutory thresholds. 11 U.S.C. § 707(b)(2)(A)(i), (b)(6); 

see also Williams v. McDow (In re Williams), No. 10-00049, 2010 WL 3292812, at *1 (W.D. Va. 

Aug. 19, 2010).

18. The initial burden lies with the moving party seeking dismissal under section 

707(b)(2). However, once a presumption of abuse arises the burden shifts to the debtor to rebut 

the presumption. See In re Showers, No. 08-30359, 2008 WL 5786900, at *3 (Bankr. E.D.Va. 

Nov. 19, 2008).

19. The debtor may rebut the presumption “by demonstrating special circumstances, 

such as a serious medical condition or a call or order to active duty in the Armed Forces, to the 

extent such special circumstances that justify additional expenses or adjustments of current 

monthly income for which there is no reasonable alternative.” 11 U.S.C. § 707(b)(2)(B)(i); see 

also In re Ervin, No. 15-70467, 2016 WL 721043, at *6 (Bankr. W.D.Va. Feb. 23, 2016); In re 

Burdett, No. 12-12066, 2013 WL 865575, at *3 (Bankr. E.D.Va. March 7, 2103). 

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20. The debtors are individuals with primarily consumer debts and whose currently 

monthly income less allowable deductions multiplied by sixty exceeds the $12,850 threshold. 

Based upon the Means Test the presumption of abuse arises. See Docket Entry No. 16, Means 

Test Part 2, Line 40.

21. The burden shifts to the debtors to rebut the presumption of abuse by establishing 

special circumstances. See In re Harmon, 446 B.R. 721, 726 (Bankr. E.D.Pa. 2011); see also In 

re Weaver, 570 B.R. 596, 600-01 (Bankr. M.D.Tenn. 2017).

22. The debtors did not allege any special circumstances and the presumption of 

abuse remains unrebutted. See Docket Entry No. 16, Means Test 4, Line 43.

23. The presumption of abuse stands unchallenged and dismissal of this case under 

section 707(b)(2) is mandatory1

. In re Witek, 383 B.R. 323, 329 (Bankr. N.D.Ohio 2007); see 

also In re Maura, 491 B.R. 493, 518 (Bankr. E.D.Mich. 2013).

24. Additionally grounds exists to dismiss this case under section 707(b)(3).

25. A court may dismiss a chapter 7 case upon a finding that granting relief would be 

an abuse under the totality of circumstances. 11 U.S.C. § 707(b)(3)(B).

26. A debtor’s ability to repay a portion of their unsecured debt alone is sufficient to 

warrant dismissal under the “totality of circumstances” analysis. See In re Williams, No. 10-

03620, 2011 WL 10468090, at *3 (Bankr. S.D. Iowa July 14, 2011) (citing United States Trustee 

 1 Some courts have construed § 707(b)(1) as giving a court the discretion of whether to allow a case to continue as a 

chapter 7 or dismiss where the presumption of abuse arises and is not rebutted. See In re Siler, 426 B.R. 167 (Bankr. 

W.D.N.C. 2010). As the court in Maura explained “[e]ven those courts that hold § 707(b)(1) to be permissive 

recognize the narrow scope of their discretion not to dismiss, in the face of an unrebutted presumption of abuse .” 

Maura, 491 B.R. at 517. The better view is articulated by Maura that the court’s discretion is whether to convert or 

dismiss a chapter 7 in light of an unrebutted presumption of abuse. Id.; see also In re Alther, 537 B.R. 262 (Bankr. 

W.D.Va. 2015). 

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v. Harris, 960 F.2d 74, 76 (8th Cir. 1994)); see also In re Calhoun, 396 B.R. 270, 275-76 (Bankr. 

D.S.C. 2008) aff'd, 650 F.3d 338 (4th Cir. 2011)2. 

27. “In deciding the Motion to Dismiss, the relevant question for the Court is not 

whether Debtors would be required to pay anything in a chapter 13 case, but whether the totality 

of the circumstances of Debtors' financial condition in this chapter 7 case show an ability to 

repay their debts.” In re Lamug, 403 B.R. 47, 57 (Bankr. N.D.Cal. 2009). 

28. “Schedules I and J is the appropriate figure to be used in examining [the debtors’] 

ability to pay as part of the totality of the circumstances test.” In re Boule, 415 B.R. 1, 6 n.7 

(Bankr. D.Mass. 2009) (citations omitted); see also In re Mestemaker, 359 B.R. 849, 858 n. 5 

(Bankr. N.D.Ohio 2007). 

29. However, when the debtor’s schedules are inaccurate the court will make 

adjustments as necessary. See In re Beckerman, 381 B.R. 841, 851-52 (Bankr. E.D.Mich. 2008); 

see also In re Lipford, 397 B.R. 320, 330-31 (Bankr. M.D.N.C. 2008) (citations omitted).

30. The debtors disclosed combined net monthly income of $5,513.95 and did not 

disclose any foreseeable decreases. See Docket Entry No. 13, Schedule I, Lines 12-13. The 

debtors appear to have stable sources of income, which supports a finding of an ability to pay 

unsecured creditors. See In re Smith, No. 15-36486, 2016 WL 7441605, at *6 (Bankr. N.D.Ill. 

Dec. 27, 2016); see also In re Bender, 373 B.R. 25, 30 (Bankr. E.D. Mich. 2007).

31. The debtors disclosed monthly expenses of $4,836.65 and disposable net monthly 

income of $677.30. See Docket Entry No. 13, Schedule J, Lines 22c, 23c.

32. Based upon the debtors’ disclosures there exists an ability to repay creditors. 

 2 The Fourth Circuit previously ruled that a debtor’s ability to repay creditors standing alone is not sufficient to 

warrant dismissal under section 707(b). Green v. Staples (In re Green), 934 F.2d 568 (4th Cir. 1991). However, 

since section 707(b) was amended in 2005 the enduring applicability of Green is unclear. See In re Fox, 521 B.R. 

520, 528-29 (Bankr. D.Md. 2014) (collecting cases).

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33. The totality of the debtors’ financial circumstances establishes their ability to pay 

creditors that supports a finding of abuse to dismiss this case. In re Williams, 2011 WL 

10468090, at *3 (citing Harris, 960 F.2d at 76)). 

CONCLUSION

WHEREFORE, the United States Trustee moves this Court to dismiss this case under 

section 707(b)(2) and section 707(b)(3)(B). Additionally, the U.S. Trustee seeks such other and 

further relief as the Court may find appropriate and just.

Respectfully Submitted,

John P. Fitzgerald, III

Acting United States Trustee 

for Region Four

By /s/ Nicholas S. Herron

Kenneth N. Whitehurst, III, Esq.

Assistant U.S. Trustee

Nicholas S. Herron, Esq.

Trial Attorney

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CERTIFICATE OF SERVICE

I certify on May 8, 2019, service on all attorney Users in the case was accomplished 

through the Notice of Electronic Filing, pursuant to CM/ECF Policy 9 of the United States 

Bankruptcy Court for the Eastern District of Virginia, Case Management/Electronic Case Files 

(CM/ECF) Policy Statement, Version 09/04/09. A copy of this Motion, Notice of Motion and 

Exhibits was mailed to: Michael A. James and Cassie P. James 25482 Mary Hunt Road, 

Newsoms, Virginia 23874 (Debtors); Gregory K. Pugh, Esq., Gregory K. Pugh, P.C., 2404 

Princess Anne Road, Virginia Beach, Virginia 23456 (Counsel for Debtors), by regular first 

class, United States mail, postage prepaid.

/s/ Nicholas S. Herron

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