457 B.R. 740
Bankr. S.D. Ill.2011Background
- Chapter 13 Trustees object to plan confirmations under 11 U.S.C. § 1325(b) for debtors with above-median income.
- Form B22C means test requires using IRS Local Standards for transportation ownership/lease expenses when applicable.
- Debtors claimed IRS Standard $496 per vehicle but their actual car payments were lower, yet they included full payments on Form B22C Line 47.
- Trustee argues full IRS Standard deduction violates § 1325(b)(3) because it exceeds actual disposable income.
- Court analyzes whether the 'notwithstanding' sentence in § 707(b)(2)(A)(ii)(I) allows full Standard even if secured car payments are less.
- Court relies on Form B22C structure and Ransom v. FIA Card Services to harmonize statute with the means test.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| May a debtor claim the full IRS transportation ownership/lease standard when a car loan exists but is less than the standard? | Scott/White/Shewmake rely on § 707(b)(2)(A)(ii)(I) plain language to claim full Standard. | Trustee contends only actual expenses should be deductible when a debt exists. | Yes; IRS Standard may be claimed in full. |
Key Cases Cited
- Ransom v. FIA Card Services, N.A., 131 S. Ct. 716 (2011) (defines 'applicable' expenses under § 707(b)(2)(A)(ii)(I))
- In re Barrett, 371 B.R. 855 (Bankr.S.D. Ill. 2007) (authorized IRS standard deductions even when actual expenses are less (pre-Ransom))
- Hamilton v. Lanning, 130 S. Ct. 2464 (2010) (discusses forward-looking vs mechanical disposable income; context for discretion)
- In re Nance, 371 B.R. 358 (Bankr.S.D. Ill. 2007) (policy favoring reduction of judicial discretion in means testing)
- In re Guzman, 345 B.R. 640 (Bankr.E.D. Wis. 2006) (form design and calculation guidance for B22C)