Legal Definitions - 707(b) action

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.