4th Circuit: In re Quigley- No Means Test Deduction in Chapter 13 for Surrendered Property

Summary: The Debtor’s Chapter 13 plan proposed the surrender of an ATV, but she nonetheless took a deduction, pursuant to 11 U.S.C. § 707(b)(2)(A)(iii), for the payments due on this secured obligation. Finding that the Supreme Court’s reasoning in Hamilton v. Lanning, 130 S. Ct. 2464 (2010), allows a bankruptcy court to “ account for changes in the debtor’s income or expenses that are known or virtually certain at the time of confirmation." Id. at 2478 (Emphasis added), the 4th Circuit disallowed the deduction from the Debtor’s “projected disposable income” under 11 U.S.C. § 1325(b). Commentary: The result of this is that Debtors with borderline “projected disposable income” should not surrender property as they end up paying the same amount, whether they keep the property or not. For a copy of the opinion, please see: Quigley- No Means Test Deduction in Chapter 13 for Surrendered Property.pdf