Chapter 7 means test. Does a leased car get treated the same way as a financed car on means test? What about on schedule B?

Asked over 1 year ago - Riverside, CA

just wondering. Doing some preliminary calculations.

Attorney answers (4)

  1. Brian Crozier Whitaker

    Contributor Level 17

    5

    Lawyers agree

    Answered . You would certainly get the operating expense deduction. Since you don't "own" the leased car, it sounds like you might not be entitled to the "ownership" expense deduction ... but I have never had a problem taking it. The rationale, if it ever became an issue, is that you are, in fact, creating a contingent ownership interest in the car as you are creating the reduced buyout.

  2. Alan D. Walton

    Pro

    Contributor Level 19

    5

    Lawyers agree

    Answered . Yes. While there are arguments otherwise, the lease payments are treated the same as purchase loan payments on the means test. I usually leave leased vehicle off of schedule B, but list the lease on G, and list it on item 14 of the Statement of Financial Affairs.

  3. Diane L Gruber

    Pro

    Contributor Level 18

    4

    Lawyers agree

    Answered . You don't own the car so it is not listed on Sch. B, goes on Sch.G. Yes, the monthly payment belongs on means test, IF there is an "assumption of abuse." Talk with a BK attorney.

    Be sure to designate "best answer." If you live in Oregon, you may call me for more detailed advice, 503-650-9662.... more
  4. Matthew Scott Berkus

    Contributor Level 20

    3

    Lawyers agree

    Answered . Generally, a leased car is not a secured debt, so you are limited to the IRS allowed ownership expense on the means test.

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