The Touseys filed a Chapter 7 bankruptcy proceeding. They reported household income above the state median income.

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The Touseys filed a Chapter 7 bankruptcy proceeding. They reported household income above the state median income. That made them subject to a means test to determine their ability to repay at least part of their debts. In performing the test, they claimed the standard IRS vehicle-operating allowance of $385 and the IRS vehicle ownership allowance of $803 for two vehicles. With these expenses, and others, subtracted from their current monthly income, they had no disposable income. That meant there was no presumption of abuse by the bankrupts and that they should be able to discharge their debts under Chapter 7. The trustee filed a motion claiming abuse. Since the Touseys owned their vehicles and there were no payments on them, he claimed they should not be allowed the vehicle deduction that they would be allowed if they had payments to make on the cars. The bankruptcy court denied the trustee's motion. The district court reversed. The Touseys appealed. Do they have a right to a vehicle deduction? [In re Ross Tousey, 549 F.3d 1148 (7th Cir., 2008)]

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The Legal Environment of Business

ISBN: 978-0538473996

11th Edition

Authors: Roger E Meiners, Al H. Ringleb, Frances L. Edwards

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