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ARTICLE · 27 AUGUST 2015

In Re Schwartz

Stoll Keenon Ogden PLLC
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The Seventh Circuit affirms the dismissal of the debtors' chapter 7 petition for cause under 11 U.S.C. § 707(a).

United StatesInsolvency/Bankruptcy/Re-Structuring
Matt Lindblom
Matt Lindblom
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(7th Cir. Aug. 24, 2015)

The Seventh Circuit affirms the dismissal of the debtors' chapter 7 petition for cause under 11 U.S.C. § 707(a). The movant had obtained a large arbitration award against the debtors and the debtors failed to make an effort to pay the award. They continued incurring monthly living expenses of $11,100 with monthly income of $9,500. The court finds that "cause" under § 707(a) is not restricted to the three procedural defects listed in that section. Cause existed here because the debtors failed to make any effort to pay creditors when they had the means to do so. "What the Schwartzes failed to do was pay as much of their indebtedness as they could without hardship. Their action was deliberate and selfish, and provides good cause for denying the discharge." Opinion below.

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