Sylvia Estevez's husband Emilio died of a sudden heart attack late last year, leaving Sylvia as the sole caretaker and supporter of their three young sons. Emilio did not have medical insurance, and Sylvia was left with approximately $100,000.00 in medical bills and other expenses. Sylvia and the boys were okay for a few months, as Emilio's employer paid a one-time death benefit of $25,000.00 to his widow. Try as she might, however, she has been unable to keep up with monthly living expenses, let alone pay back the bills stemming from her husband's passing. She makes $2,500.00 per month at her job as a teacher's assistance and receives $1,600.00 per month in Social Security. The monthly mortgage is $1,350.00 per month, her monthly car payment is $375.00, and she still has to pay gas, utilities, insurance, and figure out how to put groceries on the table. After a heart-to-heart with her family and being at her wit's end, Sylvia has concluded that filing Chapter 7 bankruptcy is the only solution available.

1. What, if anything, must Sylvia do before filing for relief under Chapter 7?
2. How much time does Sylvia have after filing the bankruptcy petition to submit the required schedules? What happens if she fails to meet the deadline(s)?
3. Assume that Sylvia does file under Chapter 7 and that the median annual family income in the area she lives in is $48,500.00. What steps would the bankruptcy court take to determine whether Sylvia's petition is presumed to be "substantial abuse" using the means test.
4. Suppose the court determines that no presumption of substantial abuse applies but determines that Sylvia has the means to pay a portion of the outstanding bills out of her regular income. What would the court likely order in that situation? Why?

References

Mayer, D., Warner, D., Siedel, G., Liberman, J., & Martina, A. (2012). Advanced business law and the legal environment. Saylor Foundation.

Mayer, Don, Daniel M.Warner, and George J.Siedel. (2012). Business Law and the Legal

Environment. Saylor Foundation.