Robert B. Van Arsdale, Esq., AUST (Va. Bar No. 17483) 

Shannon Pecoraro, Esq. (Va. Bar No. 46864) 

Office of the United States Trustee 

701 East Broad Street, Suite 4304 

Richmond, VA 23219 

Telephone (804) 771-2310 

Facsimile (804) 771-2330 

 UNITED STATES BANKRUPTCY COURT 

EASTERN DISTRICT OF VIRGINIA 

RICHMOND DIVISION 

In re 

Michelle Ann Spina 

6101 Taverneer Lane 

Spotsylvania, VA 22551 

SSN/ITIN: xxx-xx-6773 

 Debtors(s). 

 

Case No.17-33642-KLP 

Chapter 7 

NOTICE OF UNITED STATES TRUSTEE’S MOTION TO DISMISS

CASE FOR PRESUMPTION OF ABUSE PURSUANT TO 

11 U.S.C. § 707(b)(2), OR IN THE ALTERNATIVE, FOR ABUSE 

PURSUANT TO 11 U.S.C. § 707(b)(3) AND HEARING THEREON 

 

PLEASE TAKE NOTICE that the United States Trustee has filed with the Court a Motion Of 

The United States Trustee To Dismiss Case For Presumption Of Abuse Pursuant To 11 U.S.C. § 

707(b)(2), Or In The Alternative, For Abuse Pursuant To 11 U.S.C. § 707(b)(3) (the “Motion”) in the 

above-captioned case. A copy of the Motion is being served on you simultaneously herewith. 

If you do not want the Court to grant the relief sought in the Motion or if you want the Court to 

consider your views on the Motion, then on or before seven (7) days before the scheduled hearing date on 

the Motion, you or your attorney must: 

( X ) File with the Court, at the address below, a written response with supporting 

memorandum pursuant to Local Bankruptcy Rule 9013-1(H). You must mail or 

otherwise file it early enough so the Court will receive it on or before the date stated 

above. 

Clerk of Court 

United States Bankruptcy Court 

701 East Broad Street, Suite 4000 

Richmond, Virginia 23219 

You must also serve a copy on: 

Shannon Pecoraro, Esq. 

Trial Attorney 

Office of the United States Trustee 

701 East Broad Street, Suite 4304 

Richmond, VA 23219 

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( x ) Attend a hearing on the Motion which has been scheduled for November 29, 

2017 at 10:30 a.m. before the Honorable Keith L. Phillips, United States 

Bankruptcy Court, 701 East Broad Street, Suite 5100, Richmond, VA 23219. 

If you or your attorney do not take these steps, the Court may decide that you do not oppose the 

relief sought in the Motion and may enter an Order granting that requested relief without further notice or 

hearing. 

Date: September 25, 2017 Judy A. Robbins 

 United States Trustee 

 Region Four 

 /s/ Shannon Pecoraro 

Shannon Pecoraro, Esq. (Va. Bar No. 46864) 

Office of the United States Trustee 

701 East Broad Street, Suite 4304 

Richmond, VA 23219 

CERTIFICATE OF SERVICE 

I hereby certify that on September 25, 2017, a true copy of the foregoing was delivered via 

electronic mail pursuant to the Administrative Procedures of the CM/ECF system for the United States 

Bankruptcy Court for the Eastern District of Virginia to all necessary parties. In addition, a copy was 

mailed to the following on September 26, 2017: 

Michelle Ann Spina 

6101 Taverneer Lane 

Spotsylvania, VA 22551 

/s/ Shannon Pecoraro 

Robert B. Van Arsdale, Esq., AUST (Va. Bar No. 17483) 

Shannon Pecoraro, Esq. (Va. Bar No. 46864) 

Office of the United States Trustee 

701 East Broad Street, Suite 4304 

Richmond, VA 23219 

Telephone (804) 771-2310 

Facsimile (704) 771-2330

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Robert B. Van Arsdale, Esq., AUST (Va. Bar No. 17483) 

Shannon Pecoraro, Esq. (Va. Bar No. 46864) 

Office of the United States Trustee 

701 East Broad Street, Suite 4304 

Richmond, VA 23219 

Telephone (804) 771-2310 

Facsimile (804) 771-2330 

UNITED STATES BANKRUPTCY COURT 

EASTERN DISTRICT OF VIRGINIA 

RICHMOND DIVISION 

In re 

Michelle Ann Spina, 

 Debtors(s). 

 

Case No.17-33642-KLP 

Chapter 7 

MOTION OF THE UNITED STATES TRUSTEE TO DISMISS 

CASE FOR PRESUMPTION OF ABUSE PURSUANT TO 11 U.S.C. § 707(b)(2), 

OR IN THE ALTERNATIVE, FOR ABUSE PURSUANT TO 11 U.S.C. § 707(b)(3) 

 

COMES NOW JUDY A. ROBBINS, the United States Trustee for Region Four (the “U.S. 

Trustee”), through the undersigned counsel, who respectfully moves this Court for entry of an Order 

dismissing the above captioned Debtor’s (the “Debtor”) case for presumption of abuse pursuant to 11 

U.S.C. § 707(b)(2), 11 U.S.C. §§ 101, et seq. (the “Bankruptcy Code”), or, in the alternative, for abuse 

pursuant to Bankruptcy Code § 707(b)(3), and represents as follows: 

JURISDICTION 

1. This Court has jurisdiction of this matter under 28 U.S.C. §§ 1334, 151, and 157(a) and 

(b)(1). This is a core proceeding under 28 U.S.C. § 157(b)(2)(A) and (B). Venue is proper before this 

Court pursuant to 28 U.S.C. §§ 1408 and 1409. 

2. This Motion is filed pursuant to Bankruptcy Code §§ 707(b)(2) and 707(b)(3). 

TIMELINESS OF MOTION 

3. Bankruptcy Code § 704(b)(1)(a) requires the U.S. Trustee to review all materials filed by the 

debtor, and not later than ten (10) days after the date of the first meeting of creditors, file with the Court a 

statement as to whether the Debtor’s case would be presumed to be an abuse under § 707(b). 

4. The initial Chapter 7 meeting of creditors (the “341 Meeting”) was held on August 15, 2017. 

5. On August 25, 2017, pursuant to the requirements of Bankruptcy Code § 704(b)(1)(a), the 

U.S. Trustee filed a statement of presumed abuse (the “10 Day Statement”). 

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6. The deadline under Bankruptcy Code § 707(b)(2) is September 25, 2017, and the deadline 

under Bankruptcy Code § 707(b)(3) is October 16, 2017. 

7. Therefore, this Motion is timely filed. 

8. In compliance with her statutory duties under Bankruptcy Code § 707(b)(2), the U.S. 

Trustee filed this motion to preserve her deadlines, but reserves the right to file a supplemental motion 

with further details. 

FACTUAL BACKGROUND 

9. On or about July 19, 2017 (the “Petition Date”), the Debtor, with the assistance of H. 

Darden Hutson, Esquire, (“Mr. Hutson”) filed a voluntary petition for relief under Chapter 7 of the 

Bankruptcy Code. 

10. Bruce E. Robinson (the “Chapter 7 Trustee”) was appointed trustee and continues to serve as 

Chapter 7 trustee in this bankruptcy case. 

11. As filed on Schedule I, the Debtor reported gross income of $9,635.00 and net income of 

$5,809.00. 

12. As filed on Schedule J, the Debtor reported expenses of $5,881.00 and monthly net income 

of ($72.00). 

13. On Schedule E/F - Creditors Who Have Unsecured Claims, the Debtor lists creditors with 

claims totaling $14,688.00. 

14. The debts listed on the Debtor’s schedules D, E and F appear to be primarily consumer 

obligations; and the Debtor so indicated on her voluntary petition. 

15. On Official Form 122A-1 (the “Means Test”), the Debtor reports monthly gross household 

income of $11,015.00, annualized gross household income totaling $132,180.00, and a household size of 

two (2) persons. See Form 122A-1, lines 12a, 12b and 13. 

16. The applicable median family income for a family consisting of two (2) persons in Virginia 

on the Petition Date was $71,871.00. 

17. The U.S. Trustee attended the § 341 meeting and asked questions of the Debtor. 

18. The U.S. Trustee also requested and received informal discovery from the Debtor. 

19. The U.S. Trustee reviewed the documentation provided by the Debtor, which raised 

additional questions. 

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20. The U.S. Trustee sent a follow up email to Debtor’s counsel and is awaiting a response. 

21. Based on a review of the Debtor’s schedules and the documentation provided to the U.S. 

Trustee, and the Debtor’s responses at the § 341 meeting, the U.S. Trustee believes that the Debtor could 

afford a substantial Chapter 13 plan payment. 

22. The U.S. Trustee has had discussions with counsel for the Debtor and advised him that she 

would be filing this motion. 

LAW AND ANALYSIS UNDER 11 U.S.C. § 707(b)(2) 

23. In enacting the Bankruptcy Abuse and Consumer Protection Act of 2005 (“BAPCPA”), 

Congress made significant changes to the Bankruptcy Code to facilitate the prevention of abuse of the 

bankruptcy system. 

24. Cases such as the instant case demonstrate the type of abuse Bankruptcy Code § 707(b) was 

intended to prevent. 

25. Bankruptcy Code § 707(b)(1) provides that the Court may dismiss a case filed by an 

individual whose debts are primarily consumer debts, if it finds that granting relief would be an abuse of 

the provisions of Chapter 7. 

26. Section 707(b)(2)(A)(i) provides, in pertinent part, 

. . . the court shall presume abuse exists if the debtor’s current monthly 

income reduced by [certain deductions] and multiplied by 60 is not less 

than the lesser of – 

(I) 25 percent of the debtor’s nonpriority unsecured claims 

in the case or $7,700.00, whichever is greater; or 

(II) $12,850.00. 

11 U.S.C. § 707(b)(2)(A)(i) (2017). 

27. Under this provision, the Court must presume that a debtor’s chapter 7 filing is abusive if, 

inter alia, the debtor has monthly disposable income of more than $214.17 per month, or $12,850.00 over 

sixty (60) months, to fund a plan. 

28. If a presumption of abuse arises, a debtor may rebut it only by demonstrating special 

circumstances to the extent such special circumstances justify additional expenses or adjustments of 

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

(2017). 

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29. A debtor must provide a detailed explanation of the special circumstances, itemize and 

document each additional expense or adjustment of income, and attest under oath to the accuracy of the 

information provided. See 11 U.S.C. § 707(b)(2)(B)(ii) and (iii) (2017). 

30. In the event a debtor establishes special circumstances of the kind described in Bankruptcy 

Code § 707(b)(2)(B)(i), the debtor will rebut the presumption of abuse only if he or she can demonstrate 

that the additional expenses or adjustments to income cause the product of the debtor’s reduced monthly 

income, when multiplied by sixty (60), to be the lesser of (1) 25% of the debtor’s unsecured debts or 

$7,700.00, whichever is greater or (b) $12,850.00. See 11 U.S.C. § 707(b)(2)(B)(iv) (2017). 

31. Based on a review of the documentation provided, the U.S. Trustee believes that the 

Debtor’s household income is understated, and, if adjusted, would cause the presumption to arise. 

32. Additionally, the U.S. Trustee believes that the following items may be overstated on the 

Means Test – a) Line 17 – Involuntary Deductions of $779.00. 

33. The U.S. Trustee believes that the Debtor has monthly disposable income exceeding 

$214.17 and that the presumption of abuse arises. 

34. Accordingly, the U.S. Trustee submits that the relief requested herein is justified and in the 

best interest of the Debtor’s creditors and should be granted. 

LAW AND ANALYSIS UNDER 11 U.S.C. § 707(b)(3) 

35. In the event the Court does not agree that the Debtor’s case should be dismissed for 

presumption of abuse pursuant to Bankruptcy Code § 707(b)(2), the U.S. Trustee has also investigated the 

Debtor’s case for abuse pursuant to Bankruptcy Code § 707(b)(3) and asserts that dismissal under § 

707(b)(3) is also appropriate. 

36. The standard for presuming abuse under Bankruptcy Code § 707(b)(2) is based on a 

statutorily mandated calculation (as detailed above) while the standard for actual abuse under Bankruptcy 

Code § 707(b)(3) is based upon consideration of evidence of a debtor’s bad faith or totality of the 

circumstances of his or her financial situation. 

37. Whereas the court may look only to the results of the Means Test Form for dismissal 

predicated on the presumption of abuse arising under Bankruptcy Code § 707(b)(2), the Court must 

exercise its discretion to dismiss a case under Bankruptcy Code § 707(b)(3). 

38. Section 707(b)(3) of the Bankruptcy Code provides, in pertinent part, as follows: 

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In considering under paragraph (1) whether the granting of relief would 

be an abuse of the provisions of this chapter in a case in which the 

presumption in subparagraph (A)(I) does not arise or is rebutted, the court 

shall consider – 

 (A) whether the debtor filed the petition in bad faith; or

 (B) [whether] the totality of the circumstances (including whether 

the debtor seeks to reject a personal services contract and the 

financial need for such rejection as sought by the debtors) of 

the debtor’s financial situation demonstrates abuse. 

11 U.S.C. § 707(b) (2017) (emphasis added). 

 

39. Bankruptcy Code § 707(b), as amended by BAPCPA, replaces dismissal based upon 

“substantial abuse” under pre-BAPCPA § 707(b) with a mere “abuse” standard. 

40. Under § 707(b)(3) of BAPCPA, dismissal is warranted based upon “abuse” in cases where a 

debtor filed a chapter 7 case in bad faith or the totality of the circumstances indicates the debtor has the 

ability to repay a substantial portion of unsecured debt. 

41. That a chapter 7 case may be dismissed for “abuse” under § 707(b)(3) is not dependent on 

the presumption of abuse arising under § 707(b)(2). Nothing in the Code indicates that the court’s 

traditionally discretionary analysis has been replaced by the means test. 

42. Using the standard articulated in Bankruptcy Code § 707(b)(3), post-BAPCPA, the Debtor’s 

case would be an abuse. 

43. Additionally, though post-BAPCPA Bankruptcy Code § 707(b)(3) seems to have lightened 

the standard for finding abuse, the Debtor’s case would also fail if this Court were to apply the test set 

forth by the Fourth Circuit in the pre-BAPCPA case of In re Greene, 934 F.2d 568 (4th Cir. 1991) 

(adopted a "totality of circumstances" test for determining whether substantial abuse exists in a given 

Chapter 7 case). 

44. Under the Greene test, the following factors are to be analyzed: 

(a) Whether the debtor has the ability to repay; 

(b) Whether the bankruptcy petition was filed because of sudden illness, 

calamity, disability, or unemployment; 

(c) Whether the debtor incurred cash advances and made consumer 

purchases far in excess of his ability to pay; 

(d) Whether the debtor's proposed family budget is excessive or 

unreasonable; 

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(e) Whether the debtor's schedules and statement of current income and 

expenses reasonably and accurately reflect the true financial condition; 

and 

(f) Whether the petition was filed in good faith. 

Greene, 934 F.2d at 572 (citing In re Strong, 84 B.R. 541, 545 (Bankr. N.D. Ind. 1988)); In re Peluso, 72 

B.R. 732, 736 (Bankr. N.D.N.Y. 1987); In re Grant, 51 B.R. 385, 392 (Bankr. N.D. Ohio 1985) (citing 

substantially similar factors drawn from cases cited). 

45. A consumer debtor's ability to repay a significant portion of his or her unsecured debt out of 

future disposable income is a primary factor and strong evidence of abuse sufficient to rebut that 

presumption in favor of the debtor. The burden then shifts to the Debtors to demonstrate entitlement to 

Chapter 7 relief. In re Norris, 225 B.R. 329 (Bank. E.D. Va. 1998). 

46. The Debtor has not demonstrated entitlement to relief under Chapter 7 of the Bankruptcy 

Code. 

47. The U.S. Trustee does not believe that the monthly disposable income reflected on Schedule 

J is accurate. 

48. Based on the U.S. Trustee’s analysis, it appears the Debtor could afford a substantial 

Chapter 13 plan payment. 

49. Based on the U.S. Trustee’s review of the documentation provided by the Debtor, the U.S. 

Trustee notes the following with regard to Schedules I and J: 

a. Based on a review of the bank statements, the U.S. Trustee observes unexplained 

deposits, which do not appear to be included in the Debtor’s household income on 

Schedule I. 

b. Based on a review of the Debtor and her non-filing spouse’s tax returns, it appears that 

net income from the Debtor’s business may be understated. Additionally, it appears that 

her non-filing spouse worked side jobs, which income is not reflected on Schedule I. 

c. The following expenses on Schedule J appear to be overstated or excessive: 

i. Cell Phones of $480.00 

ii. Food and Housekeeping supplies of $1,000.00 

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50. The totality of the circumstances indicates that the Debtor’s financial condition does not 

warrant a Chapter 7 discharge: (a) the Debtor has the ability to repay a substantial portion of her 

unsecured debt through a Chapter 13 plan; (b) the Debtor did not file the bankruptcy petition because of 

sudden illness, calamity, disability, or unemployment; (c) the petition and schedules do not accurately 

reflect the Debtor’s true financial condition; and (d) it is questionable whether the Chapter 7 case was 

filed in good faith. 

51. Accordingly, the U.S. Trustee submits that the relief requested herein is justified and in the 

best interest of the Debtor’s creditors and should be granted. 

NOTICE 

52. Notice of this Motion has been given to: (a) the Debtor, and (b) the Chapter 7 Trustee. In 

light of the relief requested herein, the U.S. Trustee submits that no other or further notice is required. 

RELIEF REQUESTED 

53. The U.S. Trustee believes that the presumption of abuse arises in this case. 

54. The Debtor’s household income is substantially over the median income. 

55. Additionally, the Debtor has included expenses on her Means Test and Schedule J that are 

inaccurate, excessive, or inflated. 

56. Accordingly, to the extent the Debtor does not convert the case to Chapter 13, this Court 

should dismiss the case under Bankruptcy Code § 707(b)(1) because there is a presumption of abuse 

under Bankruptcy Code § 707(b)(2). 

57. In the alternative, this Court should dismiss the Debtor’s case with prejudice pursuant to 

Bankruptcy Code § 707(b)(3) based on the totality of the circumstances. 

58. Based on the foregoing, there is just cause to dismiss the Debtor’s case pursuant to 

Bankruptcy Code § 707(b)(2) or Bankruptcy Code § 707(b)(3). 

59. The U.S. Trustee reserves the right to amend this Motion or to file a supplement to same. 

 WHEREFORE, the U.S. Trustee respectfully requests that: (a) the Debtor’s discharge be deferred 

pending disposition of this motion; (b) the case be dismissed with prejudice for no less than one (1) year 

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pursuant to Bankruptcy Code § 707(b)(2) or, in the alternative, pursuant to Bankruptcy Code § 707(b)(3); and 

(c) the Court grant such other and further relief as is just. 

Respectfully requested 

Judy A. Robbins 

United States Trustee 

Region Four 

 By /s/ Shannon Pecoraro 

Trial Attorney

CERTIFICATE OF SERVICE 

I hereby certify that on September 25, 2017, a true copy of the foregoing was delivered via 

electronic mail pursuant to the Administrative Procedures of the CM/ECF system for the United States 

Bankruptcy Court for the Eastern District of Virginia to all necessary parties. In addition, a copy was 

mailed to the following on September 26, 2017: 

 Michelle Ann Spina 

 6101 Taverneer Lane 

 Spotsylvania, VA 22551 

/s/ Shannon Pecoraro 

Robert B. Van Arsdale, Esq., AUST (Va. Bar No. 17483) 

Shannon Pecoraro, Esq. (Va. Bar No. 46864) 

Office of the United States Trustee 

701 East Broad Street, Suite 4304 

Richmond, VA 23219 

Telephone (804) 771-2310 

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