## Facts

- James and Laurie Showers filed a voluntary Chapter 7 petition in January 2008, along with schedules and Official Form 22A (the Chapter 7 means test).
- The Showerses amended their schedules and Form 22A in March, May, and September 2008.
- On their amended Form 22A, the Showerses reported gross monthly household income of $11,463.64, or $137,563.68 annualized, for a household of two.
- The Virginia median income for a two-person household at the relevant time was $59,423, so the Showerses were above-median and required to complete the full § 707(b)(2) means-test calculation.
- The Showerses’ completed means test indicated no presumption of abuse, but the United States Trustee moved to dismiss under 11 U.S.C. § 707(b), arguing the calculation was incorrect.
- The Trustee identified roughly $86,000 in student-loan obligations that the Showerses had treated as means-test deductions in a way the Trustee contended was improper.
- The Showerses responded that, even if a presumption of abuse arose, they could rebut it because James Showers’s income might decline due to reduced overtime.

## Issues

1. Whether the debtors improperly classified student-loan obligations as deductible items on Form 22A such that, when corrected, the means test created a presumption of abuse under 11 U.S.C. § 707(b)(2).
2. Whether the debtors rebutted any presumption of abuse by claiming James Showers’s overtime income might decrease in the future.

## Decision

- The court found the Showerses’ annualized income exceeded the Virginia median for a two-person household, requiring application of the § 707(b)(2) means test.
- The court agreed with the United States Trustee that the Showerses had improperly classified about $86,000 in student-loan debt in the means-test computation.
- When the student-loan debt was classified correctly, the court concluded a presumption of abuse arose under § 707(b)(2).
- The court held the Showerses did not rebut the presumption based on a possible future reduction in overtime income and declined to reduce the means-test income figure on that basis.
- The court granted relief consistent with the presumption of abuse standing and the debtors’ failure to rebut it on the record presented.

## Legal Principles

- When a Chapter 7 debtor’s annualized current monthly income exceeds the applicable state median for the household size, the court applies the § 707(b)(2) means test to determine whether a presumption of abuse arises.
- The means test depends on statutory categories and defined deductions; debts or payments cannot be treated as deductions unless they fit the Code’s permitted classifications.
- If a debtor’s means-test calculation relies on misclassified obligations, the court may recompute the test, and a presumption of abuse may arise after correction.
- Once the presumption arises, the debtor bears the burden to rebut it under § 707(b)(2)(B) with specific proof meeting the statute’s “special circumstances” requirements.
- A debtor’s prediction that overtime may decline, without sufficient concrete support, is generally inadequate to justify reducing income used in the § 707(b)(2) calculation.

## Conclusion

In re Showers held that above-median Chapter 7 debtors could not avoid a § 707(b)(2) presumption of abuse by treating substantial student-loan obligations as means-test deductions in an improper classification, and that the presumption was not overcome by an unsupported claim that overtime income might drop in the future.


In re Showers, 2008 WL 5786900 (2008)