III. Exemptions From The Means Test

• Jurisdiction: North Carolina

III. EXEMPTIONS FROM THE MEANS TEST

The first consideration in applying the means test is deciding whether it applies at all. 11 U.S.C. § 707(b) contains a number of very important exemptions to the means test. If a debtor falls within the exemption, the debtor is not required to fill out Form B 122A-1 (Chapter 7). Importantly, these exemptions do not apply to Chapter 13 debtors and the disposable monthly income test set forth in 11 U.S.C. § 1325(b)(2).

A. The Means Test Only Applies to Individuals

The abuse provisions only apply to individual debtors. Corporate debtors and other entities are not subject to dismissal for abuse in Chapter 7. See 11 U.S.C. §§ 707 (b)(1), 109(e).

B. Filed Under Chapter 7

Section 707(b)(2) provides that "a case filed under this Chapter" may exclude cases filed under a different Chapter and later converted to Chapter 7. For a more detailed discussion, see Section X below: Conversion from Another Chapter.

C. Debtors With Primarily Consumer Debts

The test only applies to debtors whose debts are "primarily consumer debts." The burden of proof to support a Section 707(b) motion includes proving that the Debtor has primarily consumer debts. In re Rucker, 610 B.R. 570 (Bankr. N.D. Tex. 2019)...