Abstract
The “special circumstances” provision of the Bankruptcy Code, Section 707(b)(2)(B), allows a consumer debtor to rebut the presumption of abuse that is triggered when debtor fails the means test. Congress enacted the statute as a procedural safeguard fully aware that means testing, as set-out in the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, could lead to arbitrary results for some debtors. For consumer debtors, the provision functions as a type of escape-hatch. It allows a debtor to avoid dismissal of his Chapter 7 bankruptcy case by introducing documentary evidence that the means test calculation, and its attendant income and expense figures, is not representative of the debtor’s financial reality. The provision itself, however, offers courts little guidance on what is sufficient to constitute a “special circumstance.” Bankruptcy courts, therefore, are split on how strictly the statute should be interpreted. A number of courts construe the provision so strictly that they essentially require that debtor prove “extraordinary” circumstances before the court will allow an adjustment of debtor’s income or expense figures for means testing. As a result, the only safeguard that was put in place to protect debtors is broken. Honest debtors for whom the means test does not accurately yield their repayment capacity may be denied
Recommended Citation
Roma Perez,
Not "Special" Enough for Chapter 7: An Analysis of the Special Circumstances Provision of the Bankruptcy Code,
61 Clev. St. L. Rev.
983
(2013)
available at https://engagedscholarship.csuohio.edu/clevstlrev/vol61/iss4/6