In re Sterrenberg (No. 11-08543-8-RDD)

Thu, May 24 2012 - 10:27am by

Debtor filed chapter 7 bankruptcy, and on her original B22A Chapter 7 Statement of Current Monthly Income and Means Test included items on line 42, the deduction for secured debts. These included a $1,260 payment on former residence, $202 payment on a boat, and $670 on a car. Separately, the debtor indicated on her Statement of Intention that she intended to surrender her interest in each of these three items.

The Bankruptcy Administrator moved to dismiss the case, asserting that these deductions were improper. At issue was how to interpret the statutory phrase allowing deduction of "the total of all amounts scheduled as contractually due to secured creditors." The debtor maintained that the plan statutory language included debts due, and did not account for choices to surrender.

The Court observed that other court have come to varying conclusions when presented with this aspect of means testing. The Court found that the best interpretation of the statutory language was that once declaring an intent to surrender, the debtor no longer had no longer "scheduled" the debt as contractually due, citing to In re Ray, 362 B.R. 680 (Bankr. D.S.C. 2007). In further support of this reading, the court noted that recent major means testing decisions together "encourage[] courts to apply a more case-specific forward looking approach that takes into account the Debtor's known or virtually certain future income and expenses." The Court disallowed the deductions and granted the motion to dismiss under §707(b)(1).

Chapter 7
Full Text Source: 
http://scholar.google.com/scholar_case?case=10292606073559783809
Citation: 
In re Sterrenberg, No. 11-08543-8-RDD (Bankr. E.D.N.C. May 18, 2012)
Related Terms: 
Means Testing
Case Number: 
11-08543-8-RDD
Decision Date: 
Friday, May 18th 2012
Court Division: 
Greenville
Court: 
Bankr. E.D.N.C.
Judge: 
Randy D. Doub
Google Scholar: 
Text on Google Scholar
Primary Holding: 
debtor may not deduct on the chapter 7 means test a debt secured on property the debtor intends to surrender
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