U.S. Supreme Court Decides Ransom

On January 11, 2011, the U.S. Supreme court ruled that the Means Test (used in bankruptcy to determine a person’s ability to pay) allows the owner of a vehicle without a loan against it to claim an “operating expense” but not an “ownership expense.” That same person would be entitled to both expenses if there was a monthly payment attached to the car. The impact of the decision is to make the Means Test stricter thereby forcing more people to propose payments plan under chapter 13.