In re Grittner

520 B.R. 439, 2014 Bankr. LEXIS 4643, 2014 WL 6783755
United States Bankruptcy Court, D. Vermont·Decided November 4, 2014·No. No. 14-10529·Published

Opinion

ORDER

Denying Debtor’s Application for Waiver of the Chapter 7 Filing Fee and Granting Debtor’s Motion to Defer Due Date and Limit the Number of Installments

COLLEEN A. BROWN, Bankruptcy Judge.

On September 26, 2014, Linda R. Gritt-ner (the “Debtor”) filed a voluntary Chapter 7 petition (doc. # 1) and an application for waiver of the Chapter 7 filing fee (doc. #2) (the “Application”). On October 2, 2014, the Court entered an Order denying the Debtor’s Application and directing the Debtor to pay the filing fee in four installments, with the first installment due on October 17, 2014, and the last installment due on December 31, 2014 (doc. # 8).

On October 8, 2014, the Debtor filed a motion for reconsideration of the October 2, 2014 Order (doc. # 10). As grounds for reconsideration, the Debtor alleged her dire financial situation, coupled with the [441] substantial expense and difficulty of caring for her disabled child, made it impossible for her to make the required payments on her home and vehicle loans and pay the filing fee, even in installments. The Debt- or also provided new information concerning the sources of her income, including a “flexible family spending account” disbursement in the amount of $82 per month, which she classified as “other governmental assistance.”

On October 15, 2014, the Court entered an Order granting the Debtor’s motion for reconsideration, subject to the Debtor filing a supplement to her Application. In its Order, the Court articulated the two-pronged test the Court must apply to determine whether a debtor is eligible for a waiver of the Chapter 7 filing fee. See 28 U.S.C. § 1930(f)(1).i In order to obtain a waiver of the Chapter 7 filing fee the Debtor must establish both prongs of the test. In re Benway, 2011 WL 1522332, *3, 2011 Bankr.LEXIS 1556, *8 (Bankr. D.Vt., Apr. 19, 2011). In that Order, the Court made a findings that (1) the Debtor had established it would be a hardship for her to pay the filing fee, even in installments, and thus the Debtor had satisfied the second prong of the § 1930(f) test, but (2) the Debtor had not established her income was below 150% of the poverty line, thus failing to satisfy the first prong of the § 1930(f) test. However, based on the possibility that the Court had erroneously included, in the income prong of the test, the $82 per month of income designated as a “flexible family spending account,” and in light of the Court’s lack of familiarity with this type of benefit, the Court granted the motion for reconsideration, subject to the Debtor timely supplementing the record to show why she believed her income was below 150% of the official income poverty line. The Court made clear that if the Debtor could establish her income was below the statutory income threshold, the Court would grant the Debtor’s Application, and if the Debtor failed to do so, the Court would deny her Application.

On October 29, 2014, the Debtor timely filed supplements to the record (doc. ## 13-15). In her supplements, the Debtor advances two arguments to establish her income is below the 150% threshold. First, the Debtor argues her receipt of food stamps automatically establishes her eligibility for a waiver, because the maximum gross income threshold for USDA food stamp eligibility is 130%) of the poverty line. See Supplemental Nutrition Assistance Program Eligibility, U.S. DEP’T AGRIC. (Oct. 3, 2014), http:// www.fns.usda.gov/snap/eligibility#Income [442] [attached]. In other words, the Debtor asserts that since the USDA has found her eligible to receive food stamps, it must be true that her income is below 130% of the income official poverty line, and therefore she must qualify for a fee waiver, which only requires her income to be below 150% of the income official poverty line.

However, the Debtor’s premise that all individuals receiving food stamps have gross income below 130% of the official income poverty line is flawed. In certain instances, an individual may qualify for food stamps notwithstanding the fact that gross income exceeds the 130% threshold, e.g., where a household includes a person receiving certain types of disability payments. See id. Food stamp applicants may also, in some instances, deduct certain types of income, such as income from child support payments, which may be included in a debtor’s income for purposes of their eligibility for a waiver of the Chapter 7 filing fee. See In re Donahue, 410 B.R. 751, 755 (Bankr.N.D.Ga.2009) (holding support payments received into a household are considered income for that household for purposes of the fee waiver analysis). After considering the new evidence and arguments the Debtor presents on this point, the Court finds the Debtor has failed to establish that her eligibility to receive USDA food stamps automatically qualifies her for a fee waiver under § 1930(f).

Second, the Debtor argues that the $82 per month of income the Debtor receives in the form of what the Debtor now identifies as “flexible family funding” should be characterized as non-cash governmental assistance, and thus excluded from income for purposes of the § 1930(f) analysis. As set out in the Court’s October 15, 2014 Order, for purposes of establishing the Debtor’s eligibility for a waiver of the Chapter 7 filing fee, the Court subtracts all amounts attributable to non-cash governmental' assistance, such as food stamps. See In re Benway, 2011 WL 1522332 at *3, 2011 Bankr.LEXIS 1556 at *8. Thus, the Court has subtracted $58 per. month from the Debtor’s income, allocable to non-cash governmental assistance, to arrive at the Debtor’s monthly income of $2,011.13. The Debtor asserts that the amount of income attributable to the “flexible family funding” is analogous to food stamps, ie., non-cash governmental assistance. In support of this proposition, the Debtor directs the Court to the Flexible Family- Funding Program Guidelines. However, those guidelines state “jfunds are used at the discretion of the family,” and “[t]hese funds can be used for any legal good or activity that the family and individual choose.” Flexible Family Funding Program Guidelines, VT. DEP’T OF DISABILITIES AGING AND INDEPENDENT LIVING (July 1, 2009) (emphasis added), available at http://ddas. vermont.gov/ddas-programs/programs-flexible-family-funding-default-page [attached]. The Flexible Family Funding Program Guidelines demonstrate this benefit is cash governmental assistance. As cash governmental assistance, that amount is not excluded from the Debtor’s income for purposes of determining whether she is eligible for a Chapter 7 fee waiver. In sum, the Debtor has failed to present persuasive evidence showing “flexible family funding” income should be characterized as non-cash governmental assistance, and thus excluded from income for purposes of the § 1930(f) analysis.

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In re Grittner, 520 B.R. 439, 2014 Bankr. LEXIS 4643, 2014 WL 6783755 (Vt. 2014).

520 B.R. 439 (In re Grittner) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

In Re Donahue
410 B.R. 751 (N.D. Georgia, 2009)