In re King, 497 B.R. 161

Debtor filed Chapter 13 and proposed a 60-month plan paying $250/month, yielding 0% to unsecured creditors.
Debtor owns a 2003 Mitsubishi Lancer subject to a small title lien (non-purchase security interest taken 41 days before filing).
On Form 22C the Debtor claimed the full IRS "ownership" automobile deduction (netting $250 disposable income) while accounting for the small title-lien payment.
Chapter 13 Trustee objected, arguing the lien was unrelated to vehicle acquisition (a title loan), so the ownership deduction was not allowable and the Plan failed to include all disposable income.
Court was asked to decide whether an ownership deduction under the means test may be claimed when the car secures a loan unrelated to its purchase; court denied confirmation and ordered amendment.

Issue	Debtor's Argument	Trustee's Argument	Held
Whether an ownership deduction under the Section 707(b)(2) means test can be claimed for a loan secured by a vehicle when the loan was not for the vehicle's acquisition	Ransom’s phrase "car loan or lease" is broad; any lien secured by the car qualifies to claim the standardized ownership allowance	Ownership deduction is limited to financing/lease payments incurred to acquire or lease the vehicle; a title loan unrelated to acquisition does not qualify	Court held deduction is limited to acquisition-related financing/leases; a loan merely secured by the vehicle (title loan) does not permit the ownership deduction

Ransom v. FIA Card Serv., N.A., 131 S. Ct. 716 (U.S. 2011) (ownership deduction applies to car loan or lease payments tied to acquisition; debtor without such payments cannot claim the deduction)