Time for a new version of B22.
Perhaps the upside may be that where business expenses exceed gross income and are part of the expense side of the disposble income calculation the debtor may not be prohibited from including the full amount of actual expenses (currently B22 limits buiness income to zero or a positive number) and may pass the Means Test.
Jon Hayes wrote:
Drummond v. Weigand (In re Weigand), --- B.R. --- (9th Cir. BAP Apr, 2008) Issue: Is the "applicable commitment period" determined by a self-employed person's gross income, i.e., gross receipts, or net income, i.e., net business income?
Holding: Gross income
Judge Raplh Kirscher, Montana
Jury, Pappas, Dunn
Opinion by Jury
The debtor is self-employed. His gross income makes him an "above-median" debtor. When business expenses are deducted, he is below-median. He proposed a three year chapter 13 plan and the trustee objected. The bankruptcy court confirmed the plan over the objection.
The BAP reversed. The code "provides that business deductions are taken from the debtor's current monthly income to arrive at disposable income under 1325(b)(2)." CMI is defined as all income irrespective of whether it is taxable. Section 1325(b)(2)(B) permits the deduction of business expenses when computing disposable income. "We start with the plain meaning rule and examine the statutory language in 101(10A) and 1325(b)(2). If the statutory language is clear, we must apply it by its terms unless to do so would lead to absurd results." "If business expenses are deducted from gross receipts to determine a chapter 13 debtor's current monthly income, then there would be no need for 1325(b)(2)(B), which provides for the same deductions. We conclude that 1325(b)(2) plainly and unambiguously requires a debtor to deduct business expenses from current monthly income."
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Time for a new version of B22. Perhaps the upside may be that where business expenses exceed gross income and are part of the expense side of the disposble income calculation the debtor may not be prohibited from including the full amount of actual expenses (currently B22 limits buiness income to zero or a positive number) and may pass the Means Test.Jon Hayes <
Jhayes@polarisnet.net> wrote: Drummond v. Weigand (In re Weigand), --- B.R. --- (9th Cir. BAP Apr, 2008) Issue: Is the "applicable commitment period" determined by a self-employed person's gross income, i.e., gross receipts, or net income, i.e., net business income? Holding: Gross income Judge Raplh Kirscher, MontanaJury, Pappas, Dunn Opinion by Jury The debtor is self-employed. His gross income makes him an "above-median" debtor. When business
expenses are deducted, he is below-median. He proposed a three year chapter 13 plan and the trustee objected. The bankruptcy court confirmed the plan over the objection. The BAP reversed. The code "provides that business deductions are taken from the debtor's current monthly income to arrive at disposable income under 1325(b)(2)." CMI is defined as all income irrespective of whether it is taxable. Section 1325(b)(2)(B) permits the deduction of business expenses when computing disposable income. "We start with the plain meaning rule and examine the statutory language in 101(10A) and 1325(b)(2). If the
statutory language is clear, we must apply it by its terms unless to do so would lead to absurd results." "If business expenses are deducted from gross receipts to determine a chapter 13 debtor's current monthly income, then there would be no need for 1325(b)(2)(B), which provides for the same deductions. We conclude that 1325(b)(2) plainly and unambiguously requires a debtor to deduct business expenses from current monthly income."
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know-it-all with Yahoo! Mobile. Try it now.
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