Thomas J. Lane and Pauline Lane

1
UNITED STATES BANKRUPTCY COURT
DISTRICT OF MASSACHUSETTS
EASTERN DIVISION
____________________________________
IN RE:
THOMAS J. LANE AND 	Chapter 13
PAULINE LANE, 	Case No. 08-10840-WH
DEBTORS
____________________________________
MEMORANDUM OF DECISION
I. INTRODUCTION
The matters before the Court are the Objection to Confirmation of Chapter 13 Plan filed by
eCAST Settlement Corporation (“eCAST”), as assignee of FIA Card Services a/k/a Bank of America
and GE Money Bank/Lowe’s Consumer (the “Objection”), and the Response filed by Thomas J. and
Pauline Lane (the “Debtors”). eCAST objects to the Debtors’ plan asserting, inter alia, that the
Debtors have understated their projected disposable income by misstating their current monthly
income and by claiming an expense deduction on Form 22C for a vehicle which is owned outright.
For the reasons set forth below, I will enter an order overruling the Objection.
II. BACKGROUND
The Debtors filed a voluntary Chapter 13 petition with all schedules and a Chapter 13 plan
(the “Plan”) on February 6, 2008. On March 31, 2008, the Debtors filed an Amended Chapter 13
Statement of Current Monthly Income and Calculation of Commitment Period and Disposable
Income (“Form 22C”). On line 20 of Form 22C, the Debtors reported current monthly income of
$12,757.75. Schedule I - Current Income of Individual Debtors (“Schedule I”), however, reflected
that the Debtors have a monthly income of $14,380.45. 	Line 21 of Form 22C reflects that the
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2
Debtors’ annualized current monthly income is $153,093. 	Because this amount exceeds the
applicable median family income for debtors in this state, specifically $77,960, the Debtors are
above median income debtors with an applicable commitment period of five years pursuant to 11
U.S.C. § 1325(b)(4). As above median income debtors, they were then required to calculate their
“disposable income” with reference to the deductions allowed under 11 U.S.C. § 707(b)(2) using
National and Local Standards of the Internal Revenue Service (the “Local Standards”). 	The
following table summarizes the deductions claimed on Form 22C.
On Form 22C, the Debtors claimed an “ownership expense” for two vehicles. On Schedule
B - Personal Property (“Schedule B”), the Debtors disclosed ownership interests in a 1999
Volkswagon Cabrio GL Convertible (the “Cabrio”) and a 2003 Ford F-150 Super Cab (the “F-150”).
Schedule D - Creditors Holding Secured Claims (“Schedule D”), reveals that there is a lien against
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3
the F-150 and that the Cabrio is not subject to liens. On line 28(a) of Form 22C, the Debtors claimed
an expense of $478 under the “IRS Transportation Standards, Ownership Costs” (the “IRS
Transportation Standards”) reduced on line 28(b) by their average monthly payment of $178.15 for
a debt secured by “Vehicle 1,” in this case the F-150, for a net ownership expense of $299.85 on line
28(c). On line 29, they again claimed an expense under the IRS Transportation Standards in the
amount of $478 for “Vehicle 2,” presumably for the Cabrio. 	Consistent with Schedule D, this
expense is not reduced by any secured debt payment on the vehicle.
The total of all adjustments to determine disposable income claimed by the Debtors, as listed
on line 58 of Form 22C, is $11,470.67. When this amount is subtracted from the Debtors’ current
monthly income of $12,757.75, it yields monthly disposable income of $1,287.08. In contrast to the
amount of monthly disposable income as calculated under 11 U.S.C. § 1325(b)(3) on Form 22C,
Schedule J indicates that the Debtors have actual monthly net income of $1,456.86.
A closer review of the Debtors’ Schedules, however, reveals a mathematical error on
Schedule I. 	As indicated below, the Debtors miscalculated the subtotal of Mr. Lane’s payroll
deductions, and thus overstated their “combined average monthly income.”
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Oddly, the Debtors listed $1,430.09 as their projected monthly Chapter 13 plan1
payment, and not the $1,456.86 that they calculated on Schedule J and subsequently used as their
proposed plan payment.
$6,679.48 (Mr. Lane’s Gross Monthly Income) + $6,078.27 (Mr. Lane’s Gross Monthly2
Income) = $12,757.75 (Current Monthly Income) - $11,446.39 (Total Adjustments) = $1,311.36
4
Because the Debtors’ combined average monthly income as determined by Schedule I is used to
calculate the Debtors “monthly net income,” the error was carried over to Schedule J. This error is
illustrated below.
Accordingly, the Debtors stated their monthly net income as $1,456.86, rather than the correct
amount of $1,187.33.
This mathematical error also impacts the monthly disposable income calculation on Form
22C. 	On line 50(a) of Form 22C, the Debtors are instructed to input their “projected average
monthly Chapter 13 plan payment.” This number is the monthly net income figure generated by
Schedule J. 	It is then multiplied by the “current multiplier” based on the district in which the
Debtors reside, in this case 10%, to determine the expense deduction to which the Debtors are
entitled as an average monthly administrative expense of the Chapter 13 case. Here, the Debtors
claimed a Chapter 13 administrative expense deduction of $143.01 on line 50, rather than $118.73,
which is ten percent of the $1,187.33 properly reflected on Schedule J. 	Correcting this error further1
results in a reduction of the total adjustments to determine disposable income, yielding $11,446.39
on line 58. Accordingly, the Debtors’ monthly disposable income as properly calculated increases
to $1,311.36. 2
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(Monthly Disposable Income).
The Plan indicates that the secured claims of Washington Mutual, Ditech Home3
Financing, and Bridgewater Credit Union will be paid outside of the plan.
5
The Debtors’ Chapter 13 Plan (the “Plan”), filed contemporaneously with Form 22C,
provides for monthly payments of $1,456.86 over a term of sixty months. This plan payment is
consistent with the monthly net income figure incorrectly calculated by the Debtors in Schedule J.
Through the Plan, they do not provide for payment of any secured, priority claims, or administrative
claims. 	The Debtors propose to pay the holders of general unsecured claims a dividend of not less3
than 47.21%, totaling $78,670.20 over sixty months.
On April 2, 2008, eCAST, the alleged holder of over 40% of the Debtors’ total unsecured
debt, filed the Objection on the grounds that the Debtors fail to devote all of their projected
disposable income received during the commitment period to the unsecured creditors, and that the
amount of property to be received under the Plan is less than the amount of its claim. eCAST’s
objection asserts, inter alia, that the Debtors’ income component of the monthly disposable income
calculation fails to include reasonably anticipated income. 	Moreover, eCAST argues that the
Debtors’ projected disposable income is understated due to the Debtors’ claiming of a “phantom”
expense deduction related to the Cabrio. On April 24, 2008, the Debtors filed a response in which
they assert that there had been no change in circumstances and that the difference in gross income
reflected on Schedule J and Form 22C was the result of a software anomaly. They further argue that
while there is a split of authority on the subject, many courts have allowed debtors to claim expense
deductions on vehicles owned outright.
I conducted a hearing on the Objection on May 15, 2008. At that time, counsel for eCAST
represented that the issue with respect to the Debtors’ income had been resolved and that eCAST
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Trans. May 15, 2008 at 2, ¶ 12-19.4
Kibbe v. Sumski (In re Kibbe), 361 B.R. 302, 314 (B.A.P. 1st Cir. 2007).5
6
would not be pursuing that part of the Objection. 	No party requested a further evidentiary hearing.4
At the conclusion of oral arguments, I took the matter under advisement. eCAST subsequently filed
a brief in support of the Objection. 	This brief also addressed the income objection eCAST had
waived at the hearing. 	Two days later, the Chapter 13 trustee (the “Trustee”) filed a brief in
response. While the Debtors did not to file a brief in opposition of the Objection, on July 15, 2008,
I ordered the Debtors to file supplemental statement clarifying their response with respect to the
income disparity reported on Schedule I and Form 22C. The Debtors filed this statement on July 23,
2008, with two months of pre-petition pay advices attached. These pay advices indicate that Mrs.
Lane is paid an hourly wage, with hours and overtime fluctuating during each pay period.
III. POSITIONS OF THE PARTIES
eCAST
Relying on Kibbe v. Sumski, eCAST argues that projected disposable income should be5
calculated by using current monthly income unless that figure does not properly reflect reasonably
anticipated income. For example, if Schedule I evidences that current monthly income does not
reflect reasonably anticipated income, the income component of the projected disposable income
calculation should be adjusted. Accordingly, eCAST contends that the income component of the
projected disposable income calculation should be $14,762.35, the Debtors’ gross income as reported
on Schedule I. In its brief, however, eCAST concedes that if the Debtors are able to show that the
current monthly income figure is the same as the Schedule I figure, then it would be appropriate for
the Debtors to use $12,757.75 in the projected disposable income calculation.
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Babin v. Wilson (In re Wilson), 383 B.R. 729 (B.A.P. 8th Cir. 2008); Ransom v. MBNA6
America Bank, N.A. (In re Ransom), 380 B.R. 799 (B.A.P. 9th Cir. 2007); Grossman v. Sawdy,
384 B.R. 199 (E.D. Wis. 2008); United States Trustee v. Deadmond (In re Deadmond), No. CV
07-15-H-CCL, 2008 WL 191165 (D. Mont. Jan. 22, 2008); Meade v. McVay (In re Meade), 384
B.R. 132 (W.D. Tex. 2008); Wieland v. Thomas, 382 B.R. 793 (D. Kan. 2008); Fokkena v.
Hartwick (In re Hartwick), 373 B.R. 645 (D. Minn. 2007); Neary v. Ross-Tousey (In re
Ross-Tousey), 368 B.R. 762 (E.D. Wis. 2007).
Grossman v. Sawdy, 384 B.R. at 203.7
Babin v. Wilson, 383 B.R. at 729.8
In re Deadmond, 2008 WL 191165 at *4.9
7
On the expense side of the calculation, eCAST asserts that the Debtors are not entitled to the
$478 expense deduction related to the Cabrio. While acknowledging that there is a split of authority
on the subject, eCAST asserts that appellate courts have uniformly rejected the position that debtors
should be entitled to an ownership deduction where they have no ownership costs. 	First, eCAST6
argues that the Local Standards are not “applicable,” as required by the plain language of 11 U.S.C.
§ 707(b)(2)(A)(ii)(I), where the Debtors have no vehicle payment. Relying on Grossman v. Sawdy,
eCAST contends that the word “applicable” in 11 U.S.C. § 707(b)(2)(A)(ii)(I) modifies “monthly
expenses,” such that debtors without a car payment have no “applicable” expense. 	Citing to Babin7
v. Wilson, it asserts that applying the Local Standard to only those to whom it is “applicable” takes8
into consideration the “plain meaning” of the term as well as the purpose behind the Bankruptcy
Abuse Prevention and Consumer Protection Act of 2005 (“BAPCPA”), namely, to ensure that
debtors pay as much as they can afford. 	To illustrate, eCAST cites In re Deadmond, 	a case9
concluding that allowing the debtor to deduct “phantom payments” on non-operational cars defied
common sense as it would allow the debtor to shelter vast amounts of income. eCAST further
argues that cases drawing a distinction between “applicable” and “actual” in 11 U.S.C. § 707(b)(2)
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See, e.g., Grossman v. Sawdy, 384 B.R. at 203; In re Talmadge, 371 B.R. 96 (Bankr.10
M.D. Pa. 2007); In re Slusher, 359 B.R. 290 (Bankr. D. Nev. 2007); In re Devilliers, 358 B.R.
849 (Bankr. E.D. La. 2007); In re Lenton, 358 B.R. 651 (Bankr. E.D. Pa. 2006).
In re Slusher, 359 B.R. at 309.11
In re McGillis, 370 B.R. 720 (Bankr. W.D. Mich. 2007).12
In re Devilliers, 358 B.R. at 859.13
8
do so with no basis and attach too little meaning to “applicable.” It contends that if “applicable”
simply meant choosing the right number from the Local Standards, it would be redundant because
there is no other way to use the Local Standards.
Second, if I do not accept the meaning of “applicable” in section 707(b)(2)(A)(A)(ii)(I) as
plain, eCAST urges me to adopt the IRS guidelines, namely, the Financial Analysis Handbook of
the Internal Revenue Manual (the “IRM”), to interpret the Local Standards. eCAST asserts that
reference to the guidelines the IRS uses in applying its own standards clearly requires debtors
actually have a car payment to use the Standard as IRM 5.15.1.7 provides that “[t]axpayers will
normally be allowed the local standard or the amount actually paid, whichever is less.” eCAST notes
that numerous courts have looked to the IRM as the definitive guide to using the Local Standards.10
Relying on In re Slusher, eCAST argues that by incorporating the Local Standards into the language
of 11 U.S.C. § 707(b)(2)(A)(ii)(I), Congress evidenced its intent for the Local Standards to be
applied in a manner consistent with the IRM. 11
Third, eCAST asserts that Chapter 13 debtors’ expenses are still subject to the threshold
requirement of reasonable necessity and that BAPCPA did not eliminate an independent
determination of reasonable necessity. As such, it contends that an expense that is not incurred is
not reasonably necessary. Relying on In re McGillis 	and In re Devilliers, 	eCAST argues that 1112 	13
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9
U.S.C. § 1325(b)(3) should be interpreted as offering a further guideline to ensure the expenses
claimed by above median income debtors are reasonably necessary.
In sum, eCAST asserts that the Debtors’ income should be reduced by monthly means test
expense deductions totaling $10,992.67, $478 less than the figure used by the Debtors. This will
yield monthly disposable income of either $1,765.08 or $3,769.68, depending on whether the
Schedule I or Form 22C gross income figure is used, respectively. In any event, because the Debtors
propose monthly plan payments of only $1,456.86, eCAST argues that the they are not devoting all
projected disposable income to the Plan.
The Debtors
From the outset, the Debtors argue that Kibbe v. Sumski is inapplicable to the present case
because there has been no change to the Debtors’ income. In the Debtors’ supplemental statement
clarifying their response, the Debtors explain that Debtors’ counsel inputs all pay advices from both
Debtors for a period of six months into the “EZ-Filing” software. This includes all straight time,
overtime, vacation, and sick pay, and takes into account the frequency of each pay advice. Debtors’
counsel then inputs all payroll deductions for each pay period, including, but not limited to, tax
deductions, 401(k) contributions, and health insurance payments. 	For Form 22C purposes, the
software then calculates a monthly average income based upon the six months of information entered
by Debtors’ counsel. Here, this average was calculated to be $12,757.55.
In contrast, the Debtors explain that the software provides the user with two methods in
which to calculate monthly gross income for Schedule I. The first option allows Debtors’ counsel
to calculate monthly gross income for Schedule I in an identical manner as it does for Form 22C,
averaging a full six months of pay advices. Alternatively, the software will take the last pay advice
for each Debtor from each job and extrapolate a monthly income figure based on the amounts and
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In re Fowler, 349 B.R. 414 (Bankr. D. Del. 2006).14
See, e.g., In re Sawdy, 362 B.R. 898 (Bankr. E.D. Wis. 2007) vacated and remanded by15
Grossman v. Sawdy, 384 B.R. 199 (E.D. Wis. 2008); In re Davis, 382 B.R. 764 (Bankr. W.D.
Ark. 2008); In re Wilson, 356 B.R. 114 (Bankr. D. Del. 2006); In re Haley, 354 B.R. 340 (Bankr.
D.N.H. 2006); In re Demonica, 345 B.R. 895 (Bankr. N.D. Ill. 2006).
In re Davis, 382 B.R. at 768.16
10
frequency of those pay advices. This is the method Debtors’ counsel used to reach monthly gross
income of $14,762.35 on Schedule I.
With respect to the vehicle ownership expense deduction, the Debtors rely on In re Fowler14
for the proposition that the Local Standards are a fixed allowances and not a cap on allowable
expenses. They assert that a number of courts have held that a debtor may claim a vehicle ownership
expense deduction on a vehicle owned outright. 	The Debtors further argue that reliance on the IRM15
is inappropriate because the 11 U.S.C. § 707(b)(2)(A)(ii)(I) does not explicitly reference it.16
Moreover, the Debtors assert that while they are not obligated under a note, they do incur operational
expenses related to the use of the Cabrio.
The Trustee
The Trustee agrees with eCAST’s assertion that the correct monthly gross income value to
be used to calculate the Debtors’ monthly disposable income on Form 22C is $14,762.35. 	The
Trustee notes that the Debtors were questioned with respect to the income discrepancy between
Schedule I and Form 22C at the meeting of creditors. The Trustee states that the Debtors testified
under oath at the meeting of creditors that the income reflected in Schedule I was more
representative of their current income and their income going forward. As such, pursuant to Kibbe
v. Sumski, the Trustee contends that the income disclosed on Schedule I reflects the Debtors’
reasonably anticipated income and should be used in calculating monthly disposable income on Form
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In re Ransom, 380 B.R. 799, 807-808 (9th Cir. 2007).17
In re Phillips, 382 B.R. 153, 165 (Bankr. D. Mass. 2008).18
11
22C.
The Trustee also agrees with eCAST that the Debtor is not entitled to an ownership expense
deduction for the Cabrio. Relying on In re Ransom, the Trustee concludes that statute can only be
interpreted to apply in cases where debtors actually pay such an expense. 	The Trustee further17
argues that the analysis of the Plan does not stop with the means test. 	She contends that Judge
Feeney’s decision In re Phillips recognized an exception to the objective test found in 11 U.S.C. §
1325(b)(3): “an above-median income debtor's plan that proposes to pay the debtor's disposable
income employing the National and Local Standards in computing expenses in accordance with §
1325(b)(3) might still be objectionable in extraordinary circumstances under § 1325(a)(3) on the
basis of a lack of good faith.”18
While the Trustee generally agrees with eCAST’s arguments, she disagrees with eCAST’s
monthly disposable income figure. She asserts that using the higher income figure disclosed on
Schedule I also requires adjustments to the expense deductions on Form 22C as the payroll taxes and
401(k) contributions are correspondingly higher on Schedule I. 	Taking these adjustments into
account, the Trustee contends that monthly disposable income calculation yields $2,246.60. As such,
the Debtors have failed to devote all disposable income to the payment of unsecured creditors and
therefore the Trustee asks that I sustain the Objection.
IV. DISCUSSION
The Income Component
In Kibbe v. Sumski, the United States Bankruptcy Appellate Panel for the First Circuit
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361 B.R. at 312.19
Id. at 314-315.20
In re Lanning, 380 B.R. 17, 25 (B.A.P. 10th Cir. 2007).21
12
recognized that the term “projected disposable income” is forward-looking, and concluded that it
must be grounded in the debtor’s anticipated income during the plan and not merely on an average
of pre-petition income. 	The Panel found that where a debtor’s income at confirmation or as19
reasonably anticipated for the applicable commitment period is “materially different” from the
debtor’s disposable income as determined by 11 U.S.C. § 1325(b)(2), disposable income should then
be determined by reference to Schedules I and J to avoid “anomalous results” occasioned by a
change in the debtor’s circumstances during the six months immediately prior to the petition date.20
In the present case, eCAST and the Trustee contend that the monthly gross income as stated
on Form 22C does not adequately reflect the Debtors’ reasonably anticipated income, and therefore
monthly disposable income should be determined with reference to the income figure as stated on
Schedule I. This argument, however, must fail for several reasons.
It is the burden of the party contesting the debtor’s Form 22C disposable income figure to
come forward with evidence in support of their claim that it does not accurately reflect the debtor’s
future ability to fund a plan. 	Here, eCAST merely points to the disparity between the monthly21
gross income reported on Schedule I and Form 22C and demands that the Debtors prove which
number is correct. This is insufficient to carry their burden. While a disparity between Schedule I
and Form 22C may suggest a change in circumstances warranting a further investigation, it will not
always, by itself, prove one. 	The reason is obvious: the figures are calculated differently. 	The
monthly gross income figure on Form 22C is a historical value based on the six months preceding
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13
the bankruptcy filing. In contrast, the income figure on Schedule I is an estimate of average monthly
income at the time the case is filed. Particularly when dealing with debtors who receive an hourly
wage or overtime pay, it is not surprising that there could be fluctuations in the debtors’ income from
month to month without a significant change in income or circumstances.
Additionally, blind reliance on the disparity between the figures disclosed on Form 22C and
Schedule I misses the crux of the Debtors’ argument. They assert that Kibbe is inapplicable because
there has been no change in circumstances and that the discrepancy is a result of the Debtors’
counsel’s filing software. Neither eCAST nor the Trustee disputed this explanation at the hearing.
Nor did they request an evidentiary hearing. In fact, eCAST’s counsel represented that they would
not be pursuing the income objection. As such, I will overrule it.
In her brief, the Trustee now alleges that the Debtors indicated at the meeting of creditors that
Schedule I was more representative of their current monthly income than the figure stated on Form
22C. I note, however, that the Trustee did not file an objection to confirmation on this basis despite
the meeting of creditors taking place nearly two months prior to the hearing on the Objection. I also
note that the Trustee did not participate at the May 15, 2008 hearing.
Although I will overrule the Objection with respect to the income component of the
disposable income calculation, that does not completely resolve the issue. As discussed above, the
Debtors made a mathematical error on Schedule I that was subsequently carried to Schedule J and
Form 22C. 	Correcting this error, the Debtors’ monthly net income on Schedule J should be
$1,187.33, rather than $1,456.86, and monthly disposable income on Form 22C should be $1,311.36,
rather than $1,287.08. 	The Debtors, however, propose a monthly plan payment of $1,456.86,
$269.53 more than Schedule I indicates they have each month. As none of these figures support a
monthly plan payment of $1,456.86, I will order the Debtors to file an amended Form 22C and
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I am cognizant that this result essentially gives all three parties a “second bite at the22
apple” and likely guarantees a second round of objections to confirmation on the same basis.
The parties would be well advised to check the math and be mindful of their respective burdens
prior to filing pleadings.
14
Schedules I and J. If necessary, the Debtors shall also file an amended Chapter 13 plan consistent
with these amended documents. 22
In the interest of judicial economy, I will now address the phantom ownership expense
deduction related to the vehicle owned outright, and thus eliminating the need to do so later.
The Expense Component
Section 1325(b) of the Bankruptcy Code, as amended by BAPCPA, provides in relevant part:
(b)(1) If the trustee or the holder of an allowed unsecured claim objects to the
confirmation of the plan, then the court may not approve the plan unless, as of the
effective date of the plan--
(A) the value of the property to be distributed under the plan on
account of such claim is not less than the amount of such claim; or
(B) the plan provides that all of the debtor's projected disposable
income to be received in the applicable commitment period beginning
on the date that the first payment is due under the plan will be applied
to make payments to unsecured creditors under the plan.
(2) For purposes of this subsection, the term “disposable income” means current
monthly income received by the debtor (other than child support payments, foster
care payments, or disability payments for a dependent child made in accordance with
applicable nonbankruptcy law to the extent reasonably necessary to be expended for
such child) less amounts reasonably necessary to be expended--
(A)(i) for the maintenance or support of the debtor or a dependent of
the debtor, or for a domestic support obligation, that first becomes
payable after the date the petition is filed; and
(ii) for charitable contributions . . . ; and
(B) if the debtor is engaged in business, for the payment of
expenditures necessary for the continuation, preservation, and
operation of such business.
(3) Amounts reasonably necessary to be expended under paragraph (2), other than
subparagraph (A)(ii) of paragraph (2), shall be determined in accordance with
subparagraphs (A) and (B) of section 707(b)(2), if the debtor has current monthly
income, when multiplied by 12, greater than--
(A) in the case of a debtor in a household of 1 person, the median
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11 U.S.C. § 1325(b)(1)-(3)(A).23
11 U.S.C. § 707(b)(2)(A)(ii)(I).24
In re Young, No. 08-10012-WCH, 2008 WL 3274425 (Bankr. D. Mass. Aug. 8, 2008).25
15
family income of the applicable State for 1 earner;23
This section incorporates the means test found in 11 U.S.C. § 707(b)(2), which is used to determine
whether a Chapter 7 case is presumptively abusive. The language relevant to the current analysis
is as follows:
The debtor's monthly expenses shall be the debtor's applicable monthly expense
amounts specified under the National Standards and Local Standards, and the debtor's
actual monthly expenses for the categories specified as Other Necessary Expenses
issued by the Internal Revenue Service for the area in which the debtor resides, as in
effect on the date of the order for relief, for the debtor, the dependents of the debtor,
and the spouse of the debtor in a joint case, if the spouse is not otherwise a
dependent. . . . 24
In In re Young, 	an opinion issued while this matter was under advisement, I recently held25
that a debtor may claim a phantom ownership expense deduction on a vehicle owned outright. In
that case, I recognized a vast divergence of opinion with respect to this issue and identified seven
different rationales used to justify both positions. Ultimately, I reasoned as follows:
I find the line of cases construing the Local Standards as fixed allowances to be
persuasive. While I am loath to characterize 11 U.S.C. § 707(b)(2)(A)(ii)(I) as clear
or unambiguous in light of the vast amount of conflicting authority, I am persuaded
by the textual rationales discussed above that the most reasonable interpretation in
light of the time honored rules of statutory construction is that “shall be” indicates
that the Local Standards shall be the expense amounts entered on Form 22C without
consideration of the Debtor’s actual expenses. “Applicable” in this context simply
means that debtors shall select the appropriate values from the Local Standards table,
taking the debtor’s locality into account. 	Construing “applicable” in the manner
urged by eCAST would not properly acknowledge the distinction between that term
and “actual” mandated by their appearance in the same sentence. I further note that
reading the Local Standards as maximum allowable expenses would require me to
read several more words into 11 U.S.C. § 707(b)(2)(A)(ii)(I) as it would need to
reference a second number to form a limit.
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Id. at *11 (see original text for identified terms).26
16
I reject the Reliance on IRS Materials Rationale as it is clear that the statute neither
references or incorporates it. Moreover, this position is supported by the legislative
history or BAPCPA. The fact that the final version of the statute does not explicitly
incorporate the IRM when a prior draft did establishes that Congress knowingly and
intentionally rejected use of the IRM in this context. Additionally, I agree with the
Panel in [ Hildebrand v. Kimbro (In re Kimbro), 389 B.R. 518 (B.A.P. 6 	Cir. 2008)]th
finding 	that 	Congress 	created 	a 	bright-line 	means 	test 	in 	11 	U.S.C. 	§
707(b)(2)(A)(ii)(I) to which the discretionary nature of the IRM is incompatible.
Lastly, I note that “ownership expense” is not shorthand for a vehicle loan or lease
payment. As the definition in In re Kimbro correctly observes, ownership expenses
encompass a number of costs associate with owning a vehicle which do not include
loan or lease payments. My one caveat is that I do not agree that every vehicle has
ownership costs. While all operating vehicles incur some costs, a non-operational
vehicle with no possibility of repair, due either to mechanical issues or the debtor’s
lack of will, does not. To be entitled to an ownership expense deduction, a debtor
must first demonstrate that he does have some ownership costs.26
In the present case, the Debtors stated that they incur expenses in the operation of the Cabrio.
eCAST did not dispute this assertion or request an evidentiary hearing. Instead, they relied the same
arguments raised in the Young case. They are no more persuasive in this case. As such, the Debtors
are entitled to a vehicle ownership expense deduction with respect to the Cabrio and the Objection
is overruled.
V. CONCLUSION
In light of the foregoing, I will enter an order overruling the Objection and ordering the
Debtors to file an amended Form 22C and Schedules I and J.
______________________________
William Hillman
United States Bankruptcy Judge
Dated: August 19, 2008
Case 08-10840 Doc 42 Filed 08/19/08 Entered 08/19/08 12:14:12 Desc Main
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