Ransom v. FIA Card Services, N.A.
2011 United States Supreme Court case / From Wikipedia, the free encyclopedia
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Ransom v. FIA Card Services, N. A., 562 U.S. 61 (2011), is a decision by the Supreme Court of the United States involving the means test in Chapter 13 of the United States Bankruptcy Code. The means test had been adopted by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, and Ransom is one of several cases in which the Supreme Court addressed provisions of that act.
Ransom v. FIA Card Services, N. A. | |
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Argued October 4, 2010 Decided January 11, 2011 | |
Full case name | Jason M. Ransom v. FIA Card Services, N. A., fka MBNA America Bank, N.A. |
Docket no. | 09-907 |
Citations | 562 U.S. 61 (more) 131 S. Ct. 716; 178 L. Ed. 2d 603 |
Argument | Oral argument |
Case history | |
Prior | Plan confirmation denied, Bankr. Ct.; aff'd, In re Ransom, 380 B.R. 799 (9th Cir. B.A.P. 2007); affirmed, 577 F.3d 1026 (9th Cir. 2009); cert. granted, sub nom. Ransom v. MBNA, America Bank, N.A., 559 U.S. 1066 (2010). |
Holding | |
A Chapter 13 debtor who owns a car, but does not make loan or lease payments on it, may not take the car-ownership income allowance set forth in the Internal Revenue Service's National Standards, when calculating the means test set forth at 11 U.S.C. § 707(b). Ninth Circuit affirmed. | |
Court membership | |
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Case opinions | |
Majority | Kagan, joined by Roberts, Kennedy, Thomas, Ginsburg, Breyer, Alito, Sotomayor |
Dissent | Scalia |
Laws applied | |
11 U.S.C. § 707(b) (Chapter 13 of the United States Bankruptcy Code, as amended by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005) |
The means test determines how much disposable income debtors have to pay back their creditors, and permits debtors to shield some income from creditors for expenses based on cost tables prepared by the Internal Revenue Service. The Court ruled in Ransom, primarily in reliance on supplemental commentary authored by the IRS, that a car-ownership cost allowance was available only to debtors who made loan or lease payments on a vehicle. This judgment resolved a circuit split regarding the allowance between the Ninth Circuit, which the Supreme Court affirmed in this case, and three other circuits that had all ruled the allowance applied even to debtors who owned their cars outright.
The Court's opinion was delivered by Justice Elena Kagan, who was confirmed to the Court on August 7, 2010. The opinion was not only her first as a Supreme Court justice but also as a judge, and her participation in the case's oral argument, which was held on the first day of the Court's 2010 term, had also been her first. Justice Antonin Scalia, the sole dissenter, criticized the Court for using the supplemental commentary on the tables when the Bankruptcy Code only incorporated the tables but not the commentary.