Central District Consumer Bankruptcy Attorney's Association

Nick,
The BAP website has their opinions in PDF format.
Peter
Law Office of Peter M. Lively * Personal Financial Law Center I
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On Thursday, April 10, 2014 11:57 AM, Nicholas Gebelt wrote:
Dear Jon,
This is the second recent harsh BAP decision arising from an appeal from the Montana Bankruptcy Court the other being In re Parks, 475 B.R. 703 (B.A.P. 9th Cir. 2012) holding that Chapter 13 debtors cannot contribute to their 401(k) plans. Maybe we should encourage the people of Montana to secede from the union so we can avoid any more of these awful BAP rulings.
Because I am too cheap to pay for Lexis or Westlaw, and use Google Scholar instead, I have not yet read the BAPs Luedtke decision. However, the judge in the underlying bankruptcy case held:
The Court has analyzed the recent Supreme Court decisions Ransom and Hamilton v. Lanning, 130 S. Ct. 2464, 2469 (2010). Both cases are relevant to the issue of how a bankruptcy court should apply the means test formula and, in particular, the deference to be given to the manner in which the IRS applies its standards with respect to transportation expenses as well as the statutory text, context, and purpose of 707(b). Based on this analysis, the Court again concludes the Debtors are entitled to claim an additional $200 old vehicle operating expense in calculating their projected disposable income.
In re Luedtke, Case No. 13-60098-13 (Bankr. D. Mont. 2013),
so I am interested to see how the BAP argues against the Bankruptcy CourtThe redoubtable Judge Markell, who regularly authors well-reasoned BAP decisions, held:
As discussed in other cases, the debtor is allowed an additional operating expense deduction of $200 for older cars. See In re McGuire, 342 B.R. 608, 613 (Bankr. W.D. Mo. 2006) ([C]onsistent with IRS Local Standards, [the debtors] are entitled to claim on Form B22C an additional operating expense of $200, which expense is allowed for debtors with cars more than six years old, or having more than 75,000 miles); accord In re Oliver, 350 B.R. 294, 297 (Bankr. W.D. Tex. 2006); In re Carlin, 348 B.R. 795, 798 (Bankr. D. Or. 2006); In re Barraza, 346 B.R. 724, 729 (Bankr. N.D. Tex.2006). The IRM does not allow a deduction in addition to the ownership or operating expense, but rather allows an additional operating expense. IRM 5.8.5.5.2 (2005), http:// www.irs.gov/irm/part5/ch08s05.html. Because the IRM construes the extra deduction as part of the operating expense, this court views it as part of the definition of that expense and would
allow it.
In re Slusher, 359 B.R. 290, 310 (Bankr. D. Nev. 2007).
Thus, even the IRS an agency not known for magnanimity allows a $200 older vehicle expense. Given that BAP decisions are no more binding on bankruptcy courts (other than the court from which the appeal was taken meaning the BAPs Luedtke is only binding on the Montana court) than decisions of other bankruptcy courts, I vote for appealing to Judge Markells perspicuous holding over the draconian BAP Luedtke decision.
Your fellow warrior in the battle against Draco,
Nick
Nicholas Gebelt
Nicholas Gebelt, Ph.D., J.D.
Attorney at Law
Certified Bankruptcy Law Specialist
Law Offices of Nicholas Gebelt
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Email: ngebelt@goodbye2debt.com; ngebelt@gebeltlaw.com
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From:cdcbaa@yahoogroups.com [mailto:cdcbaa@yahoogroups.com] On Behalf Of jhayes@hayesbklaw.com
Sent: Thursday, April 10, 2014 9:20 AM
To: cdcbaa@yahoogroups.com
Subject: [cdcbaa] New BAP Opinion
The BAP has just ruled that a chapter 13 debtor cannot deduct $200 for "older vehicle operating expense." I'll put out the brief in a while. "Accordingly, because the older vehicle operating expense is not set forth or referenced in the National Standards, in the Local Standards, or in the IRM commentary identifying and interpreting those standards, it was improper for the bankruptcy court to allow the older vehicle operating expense for purposes of calculating the Luedtkes disposable income."

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