Ransom v. FIA Card Services N.A., 562 U.S. ---, 130 S.Ct. --- (2010) • NACTT Academy

Ransom v. FIA Card Services N.A., 562 U.S. —, 130 S.Ct. — (2010)

By Professor M. Jonathan Hayes, Northridge, CA

Issue: Is a chapter 13 debtor who has no auto loan entitled to deduct the IRS allowed amount for “Vehicle Ownership Costs” when computing his chapter 13 plan payment?

Holding: No

Justice Elena Kagan for an 8-1 court, Scalia dissenting

BAPCPA added a means test to the Bankruptcy Code in 2005 which requires prospective consumer debtors to make various computations in order to determine if the chapter 7 filing would be an abuse “of the provisions of this chapter.” The amendments also require “above-median” chapter 13 debtors to make . . .

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