Connecticut Allows Car Expense Without Loan

04 Mar Connecticut Allows Car Expense Without Loan

Using a common sense interpretation of the IRS Code, Judge Robert L. Krechevsky has decided that the full transportation expense should be allowed a debtor in the Means Test even though the vehicle does not have a loan on it. In the case of In Re Roberts on February 28, 2008, the U.S. Bankruptcy court in Connecticut allowed the debtor a deduction from income in the amount of $471.00 per month to cover basic transportation expenses on her 1997 Nissan. There are some who would say that even the IRS standards for transportation are insufficient in this economy.

The Office of the United States Trustee had interpreted the Bankruptcy Code contrary to this position and both that office and the standing Chapter 13 Trustee in Connecticut attempted to force the debtor to pay that extra money to her unsecured creditors. Each filed briefs in opposition to the Debtor’s motion. This would have left the debtor without money for gas, insurance, and maintenance expenses on a car that was paid off. In some jurisdictions, the transportation expense can only be allowed if there is a car loan. See the post at Attorney Cathy Moran in California for that state’s position.

This decision is a great example of well-reasoned logic creeping into a system that has become twisted and bizarre of late.

“ConnecticutGene Melchionne is a bankruptcy lawyer covering the entire State of Connecticut. He can often be found on Google+ and Twitter, where he shares information about consumer protection issues and personal finance.

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