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Means Test Violates Uniformity Requirement of the Bankruptcy Code According to Latest ABI Poll

Contact: John Hartgen
             703-739-0800
             jhartgen@abiworld.org

 

MEANS TEST VIOLATES UNIFORMITY REQUIREMENT OF THE BANKRUPTCY CODE, ACCORDING TO LATEST ABI POLL

August 7, 2007, Alexandria, Va. —A majority of respondents (59 percent) to ABI’s latest online poll agreed that the means test established by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) violates the Bankruptcy Code’s uniformity requirement because it relies on two pieces of data that vary by state. Thirty-four percent of respondents “strongly agreed” and 25 percent “somewhat agreed” that the means test, which makes calculations based on a debtors’ median income levels and IRS expense standards that vary by state, violates the Bankruptcy Code’s uniformity requirement.

Thirty-one percent of respondents, however, did not agree that that the means test established by BAPCPA violated the Bankruptcy Code’s uniformity requirement.  Twenty-four percent “strongly disagreed” and 9 percent “somewhat disagreed” that the means test violated the Bankruptcy Code because it relied on median income level data and IRS expense standards that vary by state. Six percent of the respondents did not know or had no opinion on the issue.

The poll question is based on a recent decision in which the U.S. District Court for the Eastern District of Tennessee held that BAPCPA's means testing component did not violate the Bankruptcy Code's uniformity requirement. The court, in Schultz v. U.S. (2007 WL 1447892, E.D.Tenn.), noted that the uniformity requirement does not exclude different results in different states because of state law variations and that the debtors supplied no principled reason for concluding that variations resulting from federal statistics created unconstitutional non-uniformity.  The decision is currently on expedited appeal before the Sixth Circuit Court of Appeals.

ABI members and members of the public were welcome to submit their response to the statement: “Because the means test element of BAPCPA relies on median income levels and IRS expense standards that vary by state, it violates the Code’s uniformity requirement. The latest ABI Quick Poll was open to the public for voting from July 27-August 2.

ABI’s weekly Quick Poll is posted on ABI’s home page, www.abiworld.org. ABI members and the public are invited to respond to a question on a timely bankruptcy or insolvency issue. Visit http://www.abiworld.net/quickpoll/ to access the results of previous ABI Quick Polls.

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ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABI membership includes nearly 11,500 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals, providing a forum for the exchange of ideas and information. For additional information on ABI, visit www.abiworld.org. For additional conference information, visit http://www.abiworld.org/conferences.html.