451 B.R. 174
Bankr. D. Utah2011Background
- Debtors' Form 22C shows above-median income and requires calculation of disposable income for a 60-month plan.
- Debtors own two debt-free vehicles: a 2000 Ford Contour (cira 2002) and a 1984 Chevy K10 (cira 2001) with high mileage.
- On Form 22C Line 27A they claimed $872 in vehicle operating expenses by using $236 per vehicle plus $200 per vehicle for age/mileage.
- Schedule J lists $450 per month actual vehicle operating expenses, and evidence shows actual incremental expenses about $100 per vehicle.
- Trustee objects to $400 total extra deduction as it is not automatic and may undercut the required projected disposable income.
- Court holds the $200 per vehicle deduction is not an automatic entitlement on Line 27A, but may be claimed on Line 60 under appropriate circumstances with review.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is $200 per vehicle a mandatory Line 27A deduction? | Hargis argues it is automatic if vehicles are old or high-mileage. | Anderson argues it is not automatic and should be subject to review. | Not automatic; subject to review. |
| Can additional vehicle expenses be claimed outside Line 27A? | Debtors seek Line 60 or other means to claim the expense. | Trustee supports Line 60 or other mechanisms with scrutiny. | May be claimed on Line 60 in appropriate circumstances, with review. |
| Is a $200 per vehicle cap appropriate for Line 60 deductions? | No clear cap argued; automatic entitlement. | Cap aligns with IRM guidance and limits. | Court adopts $200 per vehicle cap on Line 60, subject to review. |
| What is the proper handling of above-median debtors’ means-test deductions after Hamilton v. Lanning and Ransom? | Deductions should reflect actual expenses and be broadly available. | IRM guidance is informative but not controlling; deductions must reflect ability to repay. | Deductions must reflect actual expenses and ability to repay; not automatic under means-test. |
Key Cases Cited
- Hamilton v. Lanning, 130 S. Ct. 2464 (Supreme Court 2010) (means-test deductions must reflect debtor's actual expenses and ability to repay)
- Ransom v. FIA Card Servs., N.A., 131 S. Ct. 716 (Supreme Court 2011) (clarifies role of IRS standards and means test interpretation in above-median cases)
- In re Timothy, 442 B.R. 28 (10th Cir. BAP 2010) (means test interpretation for above-median debtors and relevant standards)
- In re May, 390 B.R. 338 (Bankr. S.D. Ohio 2008) (discussion of standards and permissible adjustments under means test)
- In re Thiel, 446 B.R. 434 (Bankr. D. Idaho 2011) (example addressing use and limits of Line 60/other adjustments)