Lack of Uniformity in the New Bankruptcy Code
There is an excellent Article in the November edition of the ABI Journal on this issue. The author (Thomas E. Ray) argues that the lack of uniformity of the exclusions under 707(b)(7), which is based on disparate median family income, renders the means test unconstitutional under Article 1, Section 8, of the Constitution. This Section grants to Congress the power to establish "uniform laws on the subject of bankruptcies throughout the United States." He argues that since the median family income varies from state to state the "uniformity" rule is violated. Because of disparities in median family income, a single debtor with an annual income under the means test of $50,000 in Connecticut would be excluded under 707(b)(7) from the presumption of abuse, while a debtor with the exact same CMI in Mississippi would be subject to the presumption and most likely a dismissal of his Chapter 7 case. Ray also argues that the second glaring lack of uniformity relates to the variances in living expenses under the means test. He cites the housing and utilities standards as the most non-uniform. He points out that the expenses not only change from state to state but from county to county within each state. For example, a family of 4 in Hamilton County, TN, would have an allowable monthly expense of $1,242, while a similar family in Polk County, TN, which is in the same judicial district, would have an allowable expenses of $935.00.
See Opinion by the late Justice Rehnquist in Railway Labor Executives Association v Gibbons, 455 U.S. 469, 473.
