Utah decsion disallowing the "older" vehicle expense...

[HHM]

Not such great news

New decision out of Utah, In Re Hargis 10-36861 (google it )

Judge disallowed the additional $200 vehicle operating allowance in a chapter 13 Bk for vehicles older than 6 years or have more than 75K miles. Stating that the provision of the Internal Revenue Manual that allows it is not incorporated into the "local standards" and therefore not part of what was intended for bankruptcy.

[momofthree]

Just more reason for someone to go out and buy a new car with a car payment, which will assuredly be higher than the $200/mo older car allowance. Some of these rulings are so backwards.

[debee]

That's what I was thinking too, momofthree. Another disincentive for smart financial planning.

[HHM]

Well, if the ruling catches on, it means more work in chap 13 for attorneys, at least those that care to get a good outcome. Instead of simply allowing it, the attorney will need to "prove" the additional expense. It will be a lot of work, but a starting point would be the statistical analysis the IRS used to come up with the number in the first place. At the end of the day, the expense simply has to be "reasonable and necessary." Heck, if you have a 10 year old Volvo, you probably need $300 per month , if you have a 10 year old Camry, probably only $150 to $200 extra.

[debee]

... it means more work in chap 13 for attorneys, .... It will be a lot of work ...

Good argument for a fee hike.