The Eight Circuit Court of Appeals in U.S. Trustee v. Ronald M. and Rhonda J. Harris holds that debtors filing for bankruptcy under Chapter 7 may be disqualified from filing if they have the ability to repay all or part of their debts pursuant to a Chapter 13 plan. The Appellate Court held that a bankruptcy court may dismiss a Chapter 7 filing under the substantial abuse provision of the bankruptcy code if the debtor could qualify to file under Chapter 13.
Creditors should utilize this in the fight to curb abusive filings of Chapter 7 petitions, and in the pursuit of debt reaffirmations.
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