Means Test Expenses – Secured Debt Expense. In a means test, a Chapter 7 debtor may deduct a secured debt expense despite an intent to surrender the collateral for the debt. The Court found that the reasoning of the Lanning and Ransom decisions simply does not apply to Code § 707(b)(2)(A)(iii), which authorizes the deduction of the “total of all amounts scheduled as contractually due to secured creditors in each month of the 60 months following the date of the filing of the petition.” The court agreed with the decisions in In re Walker, 2006 WL 1314125 (Bankr. N.D. Ga. 2006) and In re Hummel, 2007 WL 7142576 (Bankr. N.D. Ga. 2007). See also In re Rivers, 466 B.R. 558 (Bankr. M.D. Fla. 2012): In re Sonntag, 2011 WL 3902999 (Bankr. N.D. W. Va. 2011); In re Ng, 2011 WL 576067 (Bankr. D. Hawaii 2011); In re Grinkmeyer, 456 B.R. 385 (Bankr. S.D. Ind. 2011). Contra, In re Fredman, 471 B.R. 540 (Bankr. S.D. Ill. 2012)
The means test is used by the bankruptcy court to determine the debtor’s eligibility for a chapter 7 bankruptcy. A similar test is used in a chapter 13 to determine if the debtor is eligible for a 36 month or 60 month program. The test is rather complicated. If you have questions about these tests or the chapter of which you may qualify, you should seek the counsel of an experienced bankruptcy attorney to explore your options.
Means Test Expenses – Secured Debt Expenses. If you have a question about the chapter 7 or chapter 13 means test expenses, secured debt expenses – or would like to explore how bankruptcy might be just the path to a fresh start – please contact Cynthia Remboldt, at the Remboldt Law Firm, LLC. FREE consultations are available and can be scheduled by calling 404-348-4081.