The stupidity of the means test as a metering device in bankruptcy was apparent as I worked through the case of a single debtor. Because she is a renter with an old, paid-for car, and no unpaid taxes, the means test will compel her to pay a significant amount monthly to her Chapter 13 plan.
Whereas, if she had mortgages that were double or triple the amount of her rent, or an upscale new car, or years of unpaid taxes, those payments would be deductions from her income in calculating what she must pay in Chapter 13. Her unsecured creditors would get nothing: all the available money would be diverted to secured claims or taxing authorities.
Does it seem to anyone else that we are rewarding the wrong sort of behavior?
[…] Muttering about the Means Test […]
[…] cruelest part of the means test is it seems to favor people with big mortgages, car loans, unpaid child support and back taxes. […]