Friday, August 29, 2014

The Supreme Court's Decision in Ransom

Supreme Court in Ransom Chapter 13 Means TestIn 2011, the U.S. Supreme Court issued its 8-1 decision in Ransom. today. Justice Kagan wrote for the majority and Justice Scalia wrote a dissenting opinion. It was Justice Kagan's first opinion.

The majority opinion held that an over-median income debtor in chapter 13 is not entitled to the "ownership costs" deduction (approx. $471.00) in the computation of the means test (used to determine "disposable income") for a vehicle that is not encumbered by debt. The debtor is though is entitled to a deduction for the "operating costs" deduction (approx. $388.00) for an unencumbered vehicle.