See In re Praleikas, 248 B.R. 140, 145 (Bankr.W.D.Mo.2000) (citing Stuart v. Koch (In re Koch), 109 F.3d 1285, 1286 (8th Cir.1997)); see also, In re Walton, 866 F.2d 981, 984-85 (8th Cir. 1989); In re Bicsak, 207 B.R. 657, 662 (Bankr.W.D.Mo.1997); In re Regan, 269 B.R. 693, 696 (Bankr.W.D.Mo.2001). The Eighth Circuit also made clear, however, that the Court could consider the debtors' good faith in assessing whether dismissal was appropriate.
E.D. Tenn. 2003) ; In re Keating , 298 B.R. 104, 110 (Bankr. E.D. Mich. 2003) ; In re Regan , 269 B.R. 693, 696–97 (Bankr. W.D. Mo. 2001) ; In re Merrill , 255 B.R. 320, 323–24 (Bankr. D. Or. 2000) ; In re Cox , 249 B.R. 29, 32 (Bankr. N.D. Fla. 2000) ; In re Cohen , 246 B.R. 658, 666–67 (Bankr. D. Colo. 2000) ; In re Hansen , 244 B.R. 799, 802 (Bankr. N.D. Ill. 2000) ; see also Anes v. Dehart (In re Anes ), 195 F.3d 177, 180–81 (3d Cir. 1999) ; Harshbarger v. Pees (In re Harshbarger ), 66 F.3d 775, 777 (6th Cir. 1995). In 2005, however, Congress enacted the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), Pub. L. No. 109-8, 119 Stat. 23. BAPCPA amended the Bankruptcy Code and added 11 U.S.C. § 541(b)(7).
Because a presumption exists in favor of granting relief to a debtor, the burden of proof is on the United States Trustee to show that a debtor's case should be dismissed pursuant to § 707(b). In re Regan, 269 B.R. 693, 696 (Bankr. W.D. Mo. 2001). The phrase "substantial abuse" is not defined in the Bankruptcy Code. The Eighth Circuit has, however, indicated that "a Chapter 7 debtor's ability to fund a Chapter 13 plan is `the primary factor to be considered in determining whether granting relief would be a substantial abuse.'" Praleikas, 248 B.R. at 145 (citing Stewart v. Koch (In re Koch), 109 F.3d 1285, 1286 (8th Cir. 1997)); see also, In re Walton, 866 F.2d 981, 984-85 (8th Cir. 1989); In re Bicsak, 207 B.R. 657, 662 (Bankr. W.D. Mo. 1997); Regan, 269 B.R. at 696.
Because a presumption exists in favor of granting relief to a debtor, the burden of proof is on the UST to show that a debtor's case should be dismissed pursuant to § 707(b). In re Regan, 269 B.R. 693, 696 (Bankr. W.D. Mo. 2001). In this case, there is no question that Debtor's debts are primarily consumer debts.
This Court is reluctant to brand any particular kind of lawful expense as never reasonably necessary because "such an approach can clothe subjective moral judgments with the force of law." In re Woodman, 287 B.R. at 592-93 (Bankr. D. Me. 2003) (refusing to hold that cigarette expenditures are per se unreasonable); In re Regan, 269 B.R. 693, 698 (Bankr. W.D. Mo. 2001) (allowing cigarette expense); see generally In re Navarro, 83 B.R. at 356 (refusing to find charitable contributions or tithing per se unreasonable). Furthermore, Sarasota has not cited to one court decision holding that cigarette expenditures are per se unreasonable.
Debtors' Chapter 7 cases were often dismissed under the substantial-abuse test if they could repay more than 20% or 30% of the claims of their general unsecured creditors. See, e.g., In re Reeves, 327 B.R. 436, 445 (Bankr. W.D. Mo. 2005) (dismissed where debtor could make 21.8% to 27.1% repayment to general unsecured creditors); In re Regan, 269 B.R. 693, 698 (Bankr. W.D. Mo. 2001) (same, but repayment of approximately $12,000, or 29%); In re Praleikas, 248 B.R. 140, 145 (Bankr. W.D. Mo. 2000) (same, but repayment of approximately $5,500, or 20%); In re Schott, No. 05-49765-293, 2007 WL 914043, at *4 (Bankr. E.D. Mo. Mar. 23, 2007) (same, but repayment of 35%).
See Behlke v. Eisen (In re Behlke), 358 F.3d 429, 435 (6th Cir. 2004); Anes v. Dehart (In re Anes), 195 F.3d 177, 180-81 (3d Cir. 1999); In re Thompson, 370 B.R. 762, 771 (N.D.Ohio 2007); In re Glenn, 345 B.R. 831, 838 (Bankr.N.D.Ohio 2006); In re Austin, 299 B.R. 482, 486-87 (Bankr.E.D.Tenn. 2003); In re Regan, 269 B.R. 693, 696-97 (Bankr.W.D.Mo. 2001); In re Cox, 249 B.R. 29, 32 (Bankr.N.D.Fla. 2000); In re Cohen, 246 B.R. 658, 665-67 (Bankr.D.Colo. 2000); In re Heffernan, 242 B.R. 812, 818 (Bankr.D.Conn.
Many courts have examined the reasonableness and necessity of cigarette expenses in the course of an undue hardship analysis or the similar analysis of whether a Chapter 13 debtor's expenditures are reasonable and necessary or whether a debtor's expenditures for cigarettes suggest that the debtor's filing is a substantial abuse. See, e.g., In re Hornsby, 144 F.3d 433, 438 (6th Cir. 1998); Sarasota Inc. v. Weaver, 2004 WL 2514290 (E.D. Pa. Nov. 5, 2004); Waites v. Braley, 110 B.R. 211 (E.D. Va. 1990); In re Lowe, 321 B.R. 852, 858 (Bankr. N.D. Ohio 2004); In re Woodman, 287 B.R. 589, 592-97 (Bankr. D. Mo. 2003); In re Clark, 273 B.R. 207 (Bankr. N.D. Iowa 2002); In re Webster, 2002 WL 32700045 (Bankr. D. Kan. 2002); In re Regan, 269 B.R. 693, 698 (Bankr. W.D. Mo. 2001); In re Williams, 233 B.R. 423, 429 (Bankr. W.D. Mo. 1999); In re Buntin, 161 B.R. 466 (Bankr. W.D. Mo. 1993). The issue of the reasonableness and necessity of cigarette expenses is often addressed without much discussion.
Because funds that would otherwise be contributed to a retirement plan must be used to pay creditors under a Chapter 13 plan, such funds should be considered available to pay creditors for the purpose of the "substantial abuse" analysis. In re Regan, 269 B.R. 693, 696-97 (Bankr. W.D. Mo. 2001). Thus, the Court agrees with Bumann that the appropriate amount of federal and state income tax withholding amounts are $332.00 and $68.00 respectively, and Sheila Moffatt may not continue to voluntarily contribute $100.00 per month to her retirement.
E.D. Tenn. 2003) (citing In re Cox, 249 B.R. 29, 32 (Bankr. N.D. Fla. 2000)); see also In re Prout, 273 B.R. 673 (Bankr. M.D. Fla. 2002); In re Regan, 269 B.R. 693, 697 (Bankr. W.D. Mo. 2001); In re Hansen, 244 B.R. 799 (Bankr. N.D. Ill. 2000); In re Cohen, 246 B.R. 658 (Bankr. D. Colo. 2000); In re Merrill, 255 B.R. 320 (Bankr. D. Or. 2000); In re Moore, 188 B.R. 671 (Bankr. D. Idaho 1995); In re Cavenaugh, 175 B.R. 369 (Bankr. D. Idaho 1994).See, e.g., The New York City Employees' Ret. Sys. v. Sapir ( In re Taylor), 243 F.3d 124 (2nd Cir. 2001); In re Osborne, No. 02-24999, 2003 WL 1960375 (Bankr. D. Colo. 2003); see also In re Guild, 269 B.R. 470, 474 (Bankr. D. Mass. 2001) ("There is an inherent unfairness in adopting a per se rule. . . ."); In re Awuku, 248 B.R. 21, 32 (Bankr.