Debtors May Only Deduct Applicable Costs: High Court

Law360, New York (January 11, 2011, 5:52 PM EST) -- The U.S. Supreme Court ruled Tuesday that a debtor under Chapter 13 cannot claim a car ownership deduction and reduce the amount owed to creditors if the debtor is not making loan or lease payments on the vehicle.

The vehicle-ownership deduction is meant only for the cost of a car loan or lease, and maintenance expenses belong with the separate operating-costs deduction, the court ruled in an 8-1 opinion issued by Justice Kagan.

The court's decision, which upholds a ruling by the U.S. Court of Appeals...
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