high mileage car expense on the means test

[debtor36K]

They don't give you much of an allowance on the means test for transportation expenses(especially with the high price of gas) but I found a little gold nugget of info that if you car is over six years old and/or over 75,000 miles you can claim and additional $200/ month expenses. It is in the IRS financial handbook, part 5, chapter 8, section 5.8.5.5 (3) I don't know if that is common info or not because I really had to dig to find it. Thought I would share in case people didn't know!

[JRScott]

I didn't know it .

My current car is 18 years old, has a little over 100k miles.

I had to replace the water pump this past week, 141 dollars for the garage.

I spent 300-400 on new fuel lines before that back in November

I spent 200-300 on new brake lines back in August 2007

So 200 seems reasonable

[soleprop]

debtor36k, you are a lifesaver! i had seen some reference to $200 allowed for older vehicle somewhere on the forum but it wasn't backed up with the IRS financial handbook reference; you just pretty much clinched my bk for me with this - THANK YOU!!

quick explanation: i have my expenses showing $-7 with only using $100/mo for the vehicle; i was worried that the trustee could say i could somehow make that work, but now i can make it -$107 without cringing and i think it is in the bag, now.

JRScott, that's impressively low mileage for such an old car!!! lol - mine is 18yrs old and has 248k on it and climbing. god love the hondas.

[ThreadsSnapping]

They don't give you much of an allowance on the means test for transportation expenses(especially with the high price of gas) but I found a little gold nugget of info that if you car is over six years old and/or over 75,000 miles you can claim and additional $200/ month expenses. It is in the IRS financial handbook, part 5, chapter 8, section 5.8.5.5 (3) I don't know if that is common info or not because I really had to dig to find it. Thought I would share in case people didn't know!

But only if the car is paid off I believe. If you have a loan on the vehicle, this doesn't apply.

TS

[JRScott]

debtor36k, you are a lifesaver! i had seen some reference to $200 allowed for older vehicle somewhere on the forum but it wasn't backed up with the IRS financial handbook reference; you just pretty much clinched my bk for me with this - THANK YOU!!

quick explanation: i have my expenses showing $-7 with only using $100/mo for the vehicle; i was worried that the trustee could say i could somehow make that work, but now i can make it -$107 without cringing and i think it is in the bag, now.

JRScott, that's impressively low mileage for such an old car!!! lol - mine is 18yrs old and has 248k on it and climbing. god love the hondas.

A retired teacher owned it before me. That's the mileage on the odometer, however it had another engine put in it about 4 years ago and I"m not sure how many miles this engine actually has on it. (Previous engine blew ).

[berrymom31]

OMG! Is that per vehicle? We have 2 that would fit that description! If this is true and it is for both vehicles....then our chapter 7 is in the bag!!!!!!!!

[mongoose]

They don't give you much of an allowance on the means test for transportation expenses(especially with the high price of gas) but I found a little gold nugget of info that if you car is over six years old and/or over 75,000 miles you can claim and additional $200/ month expenses. It is in the IRS financial handbook, part 5, chapter 8, section 5.8.5.5 (3) I don't know if that is common info or not because I really had to dig to find it. Thought I would share in case people didn't know!

Interesting, but I don't see it: http://www.irs.gov/irm/part5/ch08s05.html#d0e99196 , maybe I'm missing it.

Also interested in the post saying that this would not apply if there is a lein on the vehicle.

[laurannm]

That is definitely an allowed expense for each car (up to 2). I've seen a few cases in my district in which the UST actually corrected the debtors means test and added the $200 expense in for them

[dragonnfly]

We are a over the median 7 and the high mileage cars is what I believe kept us there. I was digging for everything because we were so close and If we were push into a 13 I wanted cushion. So far so good, our dischage is scheduled for Friday the 1st of Aug. But Im not counting any chickens yet. Dragonnfly

[soleprop]

i think this is the thread of the month!

[mongoose]

Ok, question, In DC the allowable expense for transportation is $230, I put $550 for my '93 w/ 96k miles. I mentioned this to my atty, and he asked me what I spend and I told him:

around $325 for gas, just moved further from work, so probably $400
around $75 for ins
around $200 for maintenance (averaged out, I don't spend $200 each month, but have around $1,200+ in receipts for parts and repairs over the last 6 mos).

So actually around $600, not $550, but he said we would be fine since that is what I spend (I think I asked him twice about this and he was confident it woudln't be an issue).

I am reading on some searches here that no matter what you actually spend, you have to use the IRS allowance. Is this correct? I am wondering if I will have a problem here as I have around $80 in disposable income as everything sits now. I will have the receipts for all this (at least the repairs and ins.....gas receipts from over the last month, but credit card statements for the other gas purchases over the previous 5 mos).

Thanks for any insight. It seems everyday I find something new to worry about!

[soleprop]

you have to use the IRS allowed expenses on the means test, but NOT when you're doing schedule J; that's where you use actual expenses.

[BKParalegal]

1st you can override the IRS allowed expense as long as you have documentation ready if they ask for it. Also, the additional vehicle expense has nothing to do with if the car has a lien on it, because the additional amount is in regards to the operating of the vehicle not the ownership. And lastly, regarding Schedule J, you can put whatever amount you want as long as you can back it up, and it is a reasonable expense for your situation. Nothing is black and white in Bankruptcy. I had a client that had paid off his 2006 Cadillac Escalade worth $23k, the Vehicle Exemption was $5k leaving $18k non-exempt or so you think. I put the balance in Tools of Trade and argued with the Trustee that occasionally he had to deliver product to his client after normal delivery hours and the only vehicle he could use was his Escalade. Me 1, Trustee 0.

[berrymom31]

Dragonnfly...just curious, how much over the median are you? We are about 10,000 over after I quit my job, and over the next 6 months, hubby is going to try and cut back on some hours and take a day off without pay here and there...try to cut down on some call he takes to get it as close to the median as we can. I was just curious to see how close you were...as it seems like you are making it! We do have 2 cars that are over 6 years old and have high mileage..this would really help!

[soleprop]

I put the balance in Tools of Trade and argued with the Trustee that occasionally he had to deliver product to his client after normal delivery hours and the only vehicle he could use was his Escalade. Me 1, Trustee 0.

ok i'm going to rework my schedules with the mindset that if i can prove the expenses they are valid, and not worry whether or not the trustee or anyone else thinks they're valid. the facts are the facts; life ain't cheap and things do happen.

thanks again for your posts here, i for one am reallllly helped by them!