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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?

Riverside, CA |

just wondering. Doing some preliminary calculations.

Attorney Answers 4

  1. 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. 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. 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. Please be aware that each answer on this website is based upon the facts, or lack thereof, provided in the question. To be sure you get complete and comprehensive answers, based upon the totality of your situation, contact a local attorney who specializes in the area of law that involves your legal problem. Diane L. Gruber has been practicing law in Oregon for 26 years, specializing in family law, bankruptcy, estate planning and probate. Note: Diane L. Gruber does not represent you until a written fee agreement has been signed by you and Diane L. Gruber, and the fee listed in the agreement has been paid.

  4. 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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