RANSOM v. MBNA

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Case Basics
Docket No. 
09-907
Petitioner 
Jason M. Ransom
Respondent 
MBNA, America Bank, N.A.
Decided By 
Advocates
(for the petitioner)
(for the respondent)
(Assistant to the Solicitor General, Department of Justice, for the United States, as amicus curiae)
Term:
Facts of the Case 

Jason Ransom filed for Chapter 13 bankruptcy in Nevada in 2006 and proposed a plan to make $500 monthly payments over a period of 60 months. The chapter 13 trustee and two creditors objected to confirmation of the plan, arguing that $500 per month was not Ransom's projected disposable income as defined in the Bankruptcy Code. They argued that Ransom improperly included a deduction against income for "vehicle ownership expense" of $471. The trustee and creditors claimed that the deduction should be disallowed and that the monthly payment should be increased. The Bankruptcy Court agreed with the trustee and refused to confirm the plan. The Bankruptcy Appellate Panel, agreeing to hear the appeal on this interlocutory issue, affirmed the Bankruptcy Court. The U.S. Court of Appeals for the Ninth Circuit affirmed the Bankruptcy Court's decision.

Question 

In calculating a debtor's "projected disposable income" during a Chapter 13 bankruptcy plan period, can a bankruptcy court allow an ownership cost deduction for vehicles only if the debtor is actually making payments on the vehicles?

Conclusion 
Decision: 8 votes for MBNA, 1 vote(s) against
Legal provision: Chapter 13, Bankruptcy Act

Yes. In an 8-to-1 decision, Justice Elena Kagan, in her first opinion for the Court, ruled that a debtor who does not make loan or lease payments could not take the car-ownership deduction. Justice Antonin Scalia filed a dissenting opinion.

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RANSOM v. MBNA. The Oyez Project at IIT Chicago-Kent College of Law. 18 August 2014. <http://www.oyez.org/cases/2010-2019/2010/2010_09_907>.
RANSOM v. MBNA, The Oyez Project at IIT Chicago-Kent College of Law, http://www.oyez.org/cases/2010-2019/2010/2010_09_907 (last visited August 18, 2014).
"RANSOM v. MBNA," The Oyez Project at IIT Chicago-Kent College of Law, accessed August 18, 2014, http://www.oyez.org/cases/2010-2019/2010/2010_09_907.