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January 20, 2008

Duke Lacrosse Prosecutor Files Chapter 7

I'm not usually this voyeuristic, but I found the bankruptcy schedules of Michael Nifong on the Credit Slips blog and noticed that the B22 "Means Test" form checked the box, "presumption arises."  Many of us have wondered whether this ever happens.  There is almost no wiggle-room for arguing your way out of a presumed abuse case.  Mr. Nifong's schedules declare more than $180,000 million in debts so he certainly doesn't qualify for chapter 13.  Many of us have wondered about the effect of inability to file chapter 13 has on the "abuse" test.  The cases tend to say that is not a reason to file chapter 7.  As to chapter 11, Nifong would have to pay in his net income for five years yet that appears to be very little as he has retired and has no income beyond his pension.  Since he has been disbarred, there is no lucrative practice he can turn too. 

This is a great case for arguing that it is not an abusive filing even though the means test says it is.

An argument can also be made that the $30 million claim against Mr. Nifong asserted by each of the six students is not a "consumer debt" and therefore the means test does not apply.

I'm not sure why he filed in any event.  The battleground irrespective of the chapter will be whether or not the debt is a "willful and malicious injury" to the players.  If it is not, and he can keep the chapter 7 alive, the debts will be discharged.  If it is, the bankruptcy obviously accomplishes nothing.  It likely accomplishes nothing anyway since his only income is a pension which is presumably exempt.  His schedules show no non-exempt property.  Maybe he is planning on writing a book.       

The chapter 7 case was filed on January 15, 2008, so we can all follow along to see at least how one judge handles these issues.      

January 20, 2008 in Current Affairs | Permalink


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