4th Circuit: In re Jackson – Debtor is Entitled to the Full Means Test Deduction under National or Local Standard

Summary:

The Bankruptcy Administrator moved to dismiss the Debtors case arguing that on the Means Test they were limited to deduction of the lesser of either the actual mortgage and vehicle expenses or the amounts under the applicable National or Local standard. In affirming denial of this motion by the the bankruptcy court, the Court of Appeals held that based on the plan language of 11 U.S.C. § 707(b)(2)(A)(ii)(I) “[t]he debtor’s monthly expenses shall be the debtor’s applicable monthly expense amounts specified under the National Standards and Local Standards.” 11 U.S.C. § 707(b)(2)(A)(ii)(I) (emphases supplied). In addition to the unambiguous application of the statutory language, the Court held that a contrary result would create the absurd result of “punishing frugal debtors”, by encouraging them to incur secured debts up to the amounts under the standards.

Commentary:

In Footnote 5, this opinion also provides instructions for certification of issues for direct appeal under 28 U.S.C. § 158(d)(2)(A) and Bankruptcy Rules 8002 and 8006.

For a copy of the opinion, please see:

Jackson – Debtor is Entitled to the Full Means Test Deduction under National or Local Standard

About

1. Bachelor of Arts degree in English Literature from Washington University, 1993. 2. Juris Doctor degree from George Washington University, 1996. Admissions to Practice of Law: North Carolina Bar, 1996. Federal District Courts for the Eastern and Middle Districts of North Carolina. Specialty Certification: North Carolina State Bar: Certified as a Specialist in Consumer Bankruptcy. Areas of Practice: Practice limited to consumer and business debtor bankruptcy law, 1998 to present. Memberships: National Association of Consumer Bankruptcy Attorneys (NACBA). North Carolina Academy of Trial Lawyers (NCATL). North Carolina Bar Association, Bankruptcy Section. Lectures prepared and presented: North Carolina Academy of Trial Lawyers seminar on bankruptcy; Topic: Counseling the Consumer Debtor Prior to Court - C.Y.A. Forms to Help 'Gird They Loins'; 2001. Middle District Bankruptcy Seminar; Topic: Preparing Chapter 13 Plans; 2002. NACBA National Convention; Topic: Efficient Office Practices; 2003. NACBA National Convention; Topic: Chapter 7 vs. Chapter 13 Debates; 2004. Middle District Bankruptcy Seminar; Topic: Chapter 7 & 13 Hot Issues; 2004. Positions held: NACBA National Convention; Convention Chair; 2008. NACBA National Convention; Panel Moderator: Topic: Basic Bankruptcy Issues; 2008. NACBA National Convention; Panel Moderator; Topic: Chapter 13-Disposable Income and Other Issues; 2007. NACBA National Convention; Panel Moderator; Topic: Representing Members of the Military and Their Families; 2007. NACBA, Member of National Board of Directors, 2006 to present. NCATL, Chair of the Bankruptcy Section, 2003 to 2007. NACBA, Chair of the North Carolina Section, 2003 to 2007. NC Bar Association, Bankruptcy Section, Bankruptcy Council Member, 2004 to present.

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