Determining Whether Presumption of Abuse Does Exists

Once disposable monthly income is first calculated, it’s multiplied by 60 to help determine the money you have available for paying unsecured creditors over 5 years.

The calculation is inserted into Part VI of the Form B22A and then Part V of the Form B22C.

Abuse is then presumed if debtor has at least $11,725 over the five years to pay any unsecured creditors. It’s never presumed that if that total for the five years is under the $7,025. Abuse is then presumed if debtor could pay 25 percent of unsecured claims over 5 year period.

It’s easier to use monthly numbers to determine presumption of abuse. If debtor’s disposable income for the month is less than $117.08 a month, no abuse exists. If debtor’s disposable income for that month exceeds $195.42, presumption of abuse arises. If debtor’s disposable income falls in between those numbers, abuse is then presumed if over a 5 year period is then sufficient to pay at 25 percent of the debtor’s unsecured debts for next 60 months.

Example of the calculations

Debtor has disposable income for the month of $14.00. We calculate presumption for abuse:
$14.00 X 60 = $840.00

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