Perhaps after attending your Chapter 7 meeting of creditors, you received in the mail a notice from the United States trustee’s office considering the possible dismissal of your Chapter 7 case under code section 11 U.S.C. 707(b). What does that mean?
It means the United States trustee’s office believes you might potentially have enough income coming in on a regular monthly basis to pay your unsecured creditors more than a nominal monthly amount (typically more than a couple hundred dollars a month).
When you filed Chapter 7, you did so to obtain a discharge of certain debts. Not only do the involved creditors have the opportunity to object your discharge on for various reasons, such as fraud, but also the United States trustee’s office can object to your discharge on the basis that you have too much monthly income. The United States trustee’s office gets a certain number of days to do this. In reality, any creditor could file this objection, but it’s almost always filed by the United States trustee.
The first deadline is 10 days after your meeting of creditors. Your meeting of creditors is usually about a month after you file the case, so within 10 days of that meeting, the United States trustee’s office could send out a notice stating that they believe it is potentially abusive for you to get a Chapter 7 discharge. They will then have a second deadline of 60 days beyond your meeting of creditors to actually file a motion to dismiss your case.
If the US Trustee does not file the notice within 10 days of the meeting of creditors, they are not going to file it. However, even if they do file the initial notice, that just means they are considering filing the motion to dismiss. They may decide not to ultimately file a motion to dismiss your case.
Within the next 50 days they will likely investigate your situation. They might ask you to produce bank records, information on your spouse’s income, or your pay stubs since the case was filed. They might ask you to come in for a deposition- known as a 2004 exam. Afterward, they may make a determination that they want to file a motion requesting the judge to dismiss your Chapter 7 filing. If one is filed, you have several options and can certainly contest the motion.
Conversely, if they are satisfied with the information you provided and they believe it is okay for you to receive a Chapter 7 discharge, they will not file a motion and allow your case to be discharged.