CASE SUMMARY $20\mathrm{.}5$ In re Richie, $353$ B$.$R$.569($Bankr$.$ E$.$D$.$ Wis. $2006)$

MEANS TEST

When Charmaine Richie filed for $$ Chapter $7$ bankruptcy, she had been making a living through odd jobs over the past year yielding an completed a master's degree in outdoor therapeutic recreation administration, which qualified her to work as a therapist for those with disabilities in a camp or outdoor clinical setting. A job in this field would likely have brought Richie well above the median income and disqualified her for protection under a Chapter $7$ bankruptcy. Additionally, Richie had been looking for jobs in her field but only in the Racine$-$Kenosha area of Wisconsin, where there were very few opportunities. She was qualified to work at many other jobs that would have brought her above the median, but she wanted employment only in her chosen field and in her home geographic area.

After her petition was filed, the bankruptcy trustee requested the court to reject the Chapter $7$ petition and convert the case to a Chapter $13$ petition, whereby Richie would have to pay all or much of her debt. The trustee alleged that Richie was abusing the $[$ Chapter $7$ bankruptcy means test because she was capable of earning more money but did not. Moreover, Richie filed bankruptcy immediately after graduate school, when her future earning potential was relatively high. Richie argued that moving elsewhere to work would be a burden and having a different full$-$time job would hurt her future prospects for getting a job in her chosen field.

CASE QUESTIONS

Should Richie be forced to relocate or work in another field in order to use bankruptcy laws?

Richie lacks the ability to pay because she has not engaged in a broad employment search, does not wish to work outside her chosen field, and does not wish to work within her chosen field outside her geographic area. Should her creditors bear the burden of her choices?