US Supreme Court decides Ransom v. FIA Card Services - Debtor loses

[dontburnthep]

Wikki, based on the amounts it sounds like he used operating expenses. The pre-Ransom deducation was 496 I believe.

We are in the same situation you are- too much income (barely) for a 7 with no assets. Nice to hear what your payment might be.

[sealpup]

I'm a bit confused- could someone please clarify- does this mean that if you have an older vehicle with 100,000 plus in mileage that you can no longer take the $200 per vehicle deduction? Or you just can't take the "ownership expense" when you have no loan/lease?

From http://www.justice.gov/ust/eo/bapcpa...ne_by_line.pdf pgs 5-6
"Debtors located outside of the Fifth, Seventh, and Eighth Circuits who operate vehicles not subject to a loan or lease may deduct an additional $200 if the vehicle is owned by the debtor, and is older than six (6) model years or has more than 75,000 miles."
Does this decision make the above void?

[dontburnthep]

You can still take the $200, but cannot take the ownership expense.

[debtfreeindy]

From the way I read the decision, if you incur the payment at the time of filing, then you get the deduction. I think that was part of the argument that if a debtor had only one payment left as of the date of filing, s/he would get the benefit of the deduction but not someone who owned the vehicle free and clear.

[chrisdfw]

i definitely think this is perverse (as is much of BACPA)

Get a title loan with a payment right at the max for 4 or 6 months and get the deduction... paid off vehicle.. no deduction.

[HHM]

i definitely think this is perverse (as is much of BACPA)

Get a title loan with a payment right at the max for 4 or 6 months and get the deduction... paid off vehicle.. no deduction.

The US Trustee's will likely push back on such a tactic. The tactic was only mentioned in Scalia's dissent. So, most likely bad faith issues would be raised if someone got a token loan on their vehicle for the sole purpose of passing the means test.

To sum up again...this decision means the followings
1. No car payment, no car payment deduction on the means test.
2. You CAN still take the enhanced operating expense for older/higher mileage vehicles.