Simple English definitions for legal terms
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707(b) action: A 707(b) action is when someone asks the court to dismiss a person's bankruptcy case because they think the person is trying to take advantage of the bankruptcy system. This can happen if the court thinks the person is not being honest or is trying to hide something.
Definition: A 707(b) action is a legal motion that can be filed by the court, the United States trustee, the trustee, the administrator, or any party involved in a bankruptcy case. This motion requests that the debtor's case be dismissed because granting relief would be an abuse of the provisions outlined in Chapter 7 of the United States Bankruptcy Code.
Example: In the case of In re Stewart, the court was asked to consider a 707(b) action. The debtor had filed for Chapter 7 bankruptcy, but the trustee argued that the debtor had enough disposable income to pay off their debts through a Chapter 13 bankruptcy instead. The court ultimately agreed with the trustee and dismissed the debtor's case, stating that granting relief under Chapter 7 would have been an abuse of the bankruptcy system.
Explanation: This example illustrates how a 707(b) action can be used to prevent a debtor from abusing the bankruptcy system. In this case, the court determined that the debtor had enough income to pay off their debts through a different type of bankruptcy, and therefore, granting relief under Chapter 7 would have been inappropriate. By dismissing the case, the court ensured that the debtor could not take advantage of the system and avoid paying their debts.