Cleaning the Mess of the Means Test: The Need For A Case-by-Case Analysis of 401(k) Loans in Chapter 7 Bankruptcy Petitions

This Comment examines the relevant case law regarding Chapter 7 petitions and the policy implications of not considering 401(k) loan repayment a necessary expense. Section II provides an overview of the treatment of 401(k) loans in bankruptcy, as well as a more detailed review of means testing and an analysis of Other Necessary Expenses. Section III argues that courts should look to the facts and circumstances surrounding petitions to determine whether 401(k) loan repayments can be deducted as necessary expenses, and that doing so will not affect the ability of courts to properly dismiss abusive petitions under a totality-of-the-circumstances analysis. This Comment concludes that a 401(k) loan repayment deduction may be proper, and therefore a case-by-case analysis of a Chapter 7 petition is equitable for debtors subject to the means test