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Topics:

Topic #11:

Keywords: IRS standards . mortgages . rent . means test .

Local Standards: Housing and Utilities AND Mortgage/Rent Expense

  • Topic Overview
  • 5 Cases on This Topic
  • ?

Means Test > Expenses > IRS Allowances > Housing, Utilities, Mortgage/ Rent

Local Standards: Housing and Utilities AND Mortgage/Rent Expense

5 Cases , IssueID 11

Ch 7 Means Test
Form 22A, Line 20B
Ch 13 Means Test
Form 22C Line 25B

Topic Description:

Whether debtors are entitled to the full household expense allowance even if their actual expenses are less.

Lines of Cases:

A:

Debtor entitled to whole IRS allowance for housing, even if the actual expense is less

B::

Debtor NOT entitled to whole IRS housing expense allowance if actual expense is less

C:

What "non-mortgage expenses" include

Topic Background / Overview:

From In re Hardacre:
Explaining why you get the full amount of the allowance even if your actual expenses are less

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The effect of section 707(b)(2)(A)(ii)(I) is to permit the debtor to deduct the greater of her actual mortgage and car ownership payments or the amounts provided in the Local Standards. This is because the "notwithstanding" sentence cannot be read to require the court to reduce the allowance under the applicable Local Standard to a number that is less than zero, which the court would have to do in order for the debtor's deduction to be limited to the lesser of the amounts permitted under the Local Standards or the debtor's average monthly secured debt payments.[5] While the "shall not include" language in that sentence can be viewed as an instruction to reduce the applicable Local Standards to zero after deducting the average monthly mortgage and car ownership payments, it cannot be read to create a net negative allowance for those items under the Local Standards.

....



When section 707(b)(2)(A)(ii)(I) is construed in accordance with the foregoing analysis, section 707(b)(2)(A)(i) is placed in its proper context. Although the debtor is correct when she asserts that clause (i) requires the court to deduct all categories of expenses under clauses (ii), (iii) and (iv), her argument is vitiated by the requirement in clause (ii)(I) that the debtor reduce her allowances under the Local Standards by average monthly payments on secured debts related to mortgage and car ownership expenses.

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  • Type A = Debtor entitled to whole IRS allowance for housing, even if the actual expense is less
  • Type B = Debtor NOT entitled to whole IRS housing expense allowance if actual expense is less
  • Type C = What "non-mortgage expenses" include
  • Type E = "Everything Else"
  • Cases for Zip
  • All Cases By Date
  • Cases A - Z

Cases for Zip , California Northern District Bankruptcy Court

Ninth Circuit Cases

In re Broers

Bankr.E.D.Wash. - 2007 WL 4166144 - 2007-12-14 - 13 , Above

Google ID#:
(Type A : Debtor entitled to whole IRS allowance for housing, even if the actual expense is less )

In re Rezentes

Bankr.D.Hawaii - 368 B.R. 55 - 2007-04-02 - 13 , Above

Google ID#: 13723166781579119728
(Type B : Debtor NOT entitled to whole IRS housing expense allowance if actual expense is less )

Other Circuits

In re Musselman (Musselman v. eCast Settlement Corp.)

E.D.N.C. - 394 B.R. 801 - 2008-09-30 - 13 , Above

Google ID#: 3682934620630315002
(Type B : Debtor NOT entitled to whole IRS housing expense allowance if actual expense is less )

Debtor entitled to IRS allowance for housing, even if the actual expense is less

In re Briscoe

Bankr.D.D.C. - 374 B.R. 1 - 2007-09-04 - 13 , Above

Google ID#: 2342652270756947784
(Type A : Debtor entitled to whole IRS allowance for housing, even if the actual expense is less )

In re Farrer-Johnson

Bankr. N.D. Ill. - 353 B.R. 224 - 2006-09-15 - 13 ,

Google ID#: 17694754915058519033
(Type A : Debtor entitled to whole IRS allowance for housing, even if the actual expense is less )

Debtor in rent free military housing was allowed to take full IRS allowance.

In re Musselman (Musselman v. eCast Settlement Corp.)

E.D.N.C. - 394 B.R. 801 - 2008-09-30 - 13 , Above

Google ID#: 3682934620630315002
(Type B : Debtor NOT entitled to whole IRS housing expense allowance if actual expense is less )

Debtor entitled to IRS allowance for housing, even if the actual expense is less

In re Broers

Bankr.E.D.Wash. - 2007 WL 4166144 - 2007-12-14 - 13 , Above

Google ID#:
(Type A : Debtor entitled to whole IRS allowance for housing, even if the actual expense is less )

In re Briscoe

Bankr.D.D.C. - 374 B.R. 1 - 2007-09-04 - 13 , Above

Google ID#: 2342652270756947784
(Type A : Debtor entitled to whole IRS allowance for housing, even if the actual expense is less )

In re Rezentes

Bankr.D.Hawaii - 368 B.R. 55 - 2007-04-02 - 13 , Above

Google ID#: 13723166781579119728
(Type B : Debtor NOT entitled to whole IRS housing expense allowance if actual expense is less )

In re Farrer-Johnson

Bankr. N.D. Ill. - 353 B.R. 224 - 2006-09-15 - 13 ,

Google ID#: 17694754915058519033
(Type A : Debtor entitled to whole IRS allowance for housing, even if the actual expense is less )

Debtor in rent free military housing was allowed to take full IRS allowance.

All Cases A to Z


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If you're not familiar with what "case law" is, and how to use it, check out Chapter 7 of Nolo's LegalResearch: How to Find and Understand the Law for a guide to how to read through a case to get the parts that matter.

Also, you need to be familiar with the concept of "jurisdiction." Here are some helpful links:

When you read a case, check to make sure that the case's decision applies to your local district. Do this by looking at which court has decided the case -- either the U.S. Supreme Court, a court of appeal (listed here in large type), or a district court (listed in small type).  Your local district court judge is not bound to follow the opinion of judges from other district courts, but often they look to these cases for advice. Your local district, however, is bound  to follow decisions in cases from it governing circuit court. You'll see fairly few Supreme Court case here, but those cases are also binding on all districts."

Are these all the bankruptcy cases there are?

NO! NO! NO! This is a start for your research. New cases are constantly being decided. I update this when I have time. This is only a fraction of the actual published opinions out there. Dozens of cases are handed down nationwide every week. I catalog interesting ones when I have time. They are meant to serve as a starting point for your research -- NOT as a comprehensive listing of the current state of the law.

 

DISCLAIMER. By using this database you acknowledge and agree to the following:

This database does not contain every relevant case in every district on the topics covered; there are high priced services for that. This is free. It is offered to the public "as is" as an adjunct to the Nolo books, How to File Chapter 7 Bankruptcy, and Chapter 13 Bankruptcy: Keep Your Property and Repay Your Debts Over Time (10th Edition, 2010): which I co-author with attorney Stephen Elias.

This database is updated as time permits. Do not assume that it has the latest case in your district. We are still filling holes in the database -- and will always be. Use it as a place to start your reasearch, rather than the final answer to your question.

Some of these issues involve the discretion of the judge which can vary from judge to judge. So, even if you find a case just like yours where a judge went your way, as they say in the car biz, "your mileage may vary..."

If you're not familiar with what "case law" is, and how to use it, check out Chapter 7 of Nolo's LegalResearch: How to Find and Understand the Law for a guide to how to read through a case to get the parts that matter.

For more help, click the "?" tab.

 


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