My Car Is Paid For, Can I Deduct Ownership Expense on Means Test?

OWNERSHIP EXPENSE NOT ALLOWED IF VEHICLE PAID FOR
In re Howell, Case No. 06-11652
April 2007, Judge Nugent

Trustee objected to 13 confirmation under 1325(b)(1)(B) on basis that debtors projected disposable income was too low because they were deducted an ownership expense on Line 28 of B22C even though vehicle was fully paid for and even though they had claimed a standard vehicle operating allowance on Line 27. Objection Sustained, even though 707(b) (2) (A) (ii) (I) and B22C do not offer specific guidance.  Judge Nugent rejected the other view on the basis that an expense is not “applicable” if it is not actually incurred.

Digest by:  Jan Hamilton, Trustee

My Income Is Below Median, How Long Do I Pay My Chapter 13 Payments?

BELOW THE LINE DEBTOR MUST RUN 36 MONTHS
In re Pohl, Case No. 06-41236
May 2007, Judge Karlin
The Court determined that a below the line debtor’s case must “run” 36 months, unless it
pays off all claims in full, citing 1325(b)(4). Below the line disposable income
determined by Schedule J, since the bottom half of B22C does not get filled out by a BMI
debtor. ACP is temporal and not a multiplier. Judge Karlin cited, with approval, Judge
Somers’ decision, In re Daniel and Judge Berger’s decisions, In re Beckerle and In re
Anderson on the ACP issue.

BELOW THE LINE DEBTOR MUST RUN 36 MONTHS
In re Pohl, Case No. 06-41236
May 2007, Judge Karlin

The Court determined that a below the line debtor’s case must “run” 36 months, unless it pays off all claims in full, citing 1325(b)(4). Below the line disposable income determined by Schedule J, since the bottom half of B22C does not get filled out by a BMI debtor. ACP is temporal and not a multiplier. Judge Karlin cited, with approval, Judge Somers’ decision, In re Daniel and Judge Berger’s decisions, In re Beckerle and In re Anderson on the ACP issue.

Source:  Jan Hamilton, Trustee

Topeka Debtors Allowed Means Test Deduction for Cars With No Liens

EDITOR UPDATE:  This post is out of date.  Judge Karlin reverted to her original ruling in In re Law after the Pearson decision was vacated.  This issue is currently pending the the U.S. Court for the Tenth Circuit  so we should have a binding ruling soon.  December 13, 2009.

Topeka Bankruptcy Judge Janice Miller Karlin announced last week that she is reversing course and will follow the Pearson decision to allow debtors a means test deduction for ownership of a car without a debt against it.

Judge Karlin had earlier disallowed the car ownership deduction in In re Law, 2008 WL 1867971 (Bankr. D. Kan. 2008), following the decision by Kansas District Court Judge John W. Lungstrum in Wieland v. Thomas, 382 B.R. 793 (D. Kan. March 4, 2008), reversing Judge Robert D. Berger of Kansas City, KS, in In re Thomas, 2007 WL 2903201 (Bankr. D. Kan. Oct. 02, 2007). [Read more…]

More Kansans Can Qualify for Bankruptcy Help with Increased Income Allowances

The Kansas income guidelines for the bankruptcy means test go up February 1, 2008.

Kansas Median Family Income by Family Size for Bankruptcy Cases Filed on or After February 1, 2008,

  • 1 earner……….$38,594
  • 2 persons……..$52,989
  • 3 persons …….$58,075
  • 4 persons …….$69, 831
  • 5 persons …….$76,731
  • 6 persons …….$83,631
  • Add $6,900 for each additional individual