Presumed Abuse at Legal Glossary

What is it? In a Chapter 7 bankruptcy, when the debtors current monthly income exceeds the family median income for his or her state and he or she cannot pass the means test, the court will presume that the debtor has sufficient income to fund a Chapter 13 plan. In this situation, the debtor will not be allowed to proceed with a Chapter 7 bankruptcy unless the debtor can prove that he or she is not abusing the Chapter 7 bankruptcy remedy.

Law Definition Added By: Isabelle

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