top Ad Widget

Collapse

Announcement

Collapse
No announcement yet.

Means Test and Cars

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    Means Test and Cars

    Greetings. On the B22A, Lines 23 and 24, you enter the "Local Standards: transportation ownership/lease expense" for "vehicles 1 and 2." What if you don't have a car payment? The form itself does not directly address that situation. It specifies that you would input the IRS standard in "a." and subtract any "average monthly payment" in "b." for a "net ownership/lease expense" in "c." But what if there is no payment for "b."?

    It may seem like an obvious answer (you can't deduct anything), but consider -- the makers of "EZ Filing," a software package for attorneys that assists in the preparation of bankruptcy forms, states the following in the user guide for the software, where it discusses line 23:

    "If the following is true, check the Exclude box:

    -- There is no lien against the car.
    -- You or your trustee believe that the debtor can claim an ownership cost only when there is a lien against the automobile."

    You exclude if "you or your trustee believe?" Clearly, even the makers of the software aren't certain.



    Or look at it this way: let's say I bought a car at Crazy Eddie's Used Car Emporium or whatever, it's the most hideous hoopty on the Face of the Earth, and my car payment is only ONE DOLLAR per month. Then what? How would I complete the B22A? This way: the full IRS standard in 23a, the $1.00 in 23b, and the net of 23a minus 23b in 23c. The $1.00 per month would also appear in Subpart C, Line 42, as a secured debt -- but the end result would be a deduction of the full IRS standard for the vehicle, not merely a deduction of one dollar.

    If that's true, why do I need to have a car payment at all?

    Thanks in advance for any useful answers. I posted this on the Usenet newsgroup alt.bankruptcy, and some guy responded that it "is the position of the U.S. Trustee" that you must have a car payment. But he didn't say which of the 21 trustees, and he didn't say how he knows it.

    Godzilla

    #2
    Check out the McGuire case decided in Feb 2006 in the Western District of Missouri at http://www.mow.uscourts.gov/opinions...an/mcguire.pdf . Pages 7-10 discuss the this bk court's interpretations about what to do with car deductions when the debtor's car is already paid in full. There are some applicable arguments here for your situation of not owning a car at all. Hope this helps and keep us posted on what happens in your case. Good luck!
    I am not a lawyer and this is not legal advice nor a statement of the law - only a lawyer can provide those.

    06/01/06 - Filed Ch 13
    06/28/06 - 341 Meeting
    07/18/06 - Confirmation Hearing - not confirmed, 3 objections
    10/05/06 - Hearing to resolve 2 trustee objections
    01/24/07 - Judge dismisses mortgage company objection
    09/27/07 - Confirmed at last!
    06/10/11 - Trustee confirms all payments made
    08/10/11 - DISCHARGED !

    10/02/11 - CASE CLOSED
    Countdown: 60 months paid, 0 months to go

    Comment


      #3
      Thanks for that most excellent reference, Irprn. From that I learned about the additional $200.00 for a car that is more than six years old or has more than 75,000 miles. That's my situation, but for BOTH cars, not just one as in the McGuire case. So, would you or anyone else care to comment on whether I could take $200.00, or $400.00?

      Godz

      Comment


        #4
        Okay - for those of us (okay, just me) in the slow group...

        Am I able to claim the entire vehicle ownership/lease allowance for both our cars if they are paid in full? Basically we have a 1997 Nissan pick-up and a 1999 Honda CR-V and in Los Angeles they give us a $489 Ownership/Lease allowance per car.

        Do I actually get $978 of deductions?

        Comment


          #5
          In my district (Southern Texas) you can claim the vehicle ownership allowance for EACH car whether or not there is a loan. It is my understanding that in other districts that do not allow this, you can claim the $200 (over 6 years/75K miles) for each car.

          Rules may vary by district.

          Comment


            #6
            Ugh - just did a search online and found that our 9th district court disallowed the ownership expense

            Well it looks like we are getting kicked into Ch13. Oh boy. Yay. I'm f*&^*%g thrilled.

            Comment

            bottom Ad Widget

            Collapse
            Working...
            X