Elena Kagan

“ Further, Ransom's argument mistakes what the deductions in the means test are meant to accomplish. Rather than effecting any broad federal policy as to saving or borrowing, the deductions serve merely to ensure that debtors in bankruptcy can afford essential items. The car-ownership allowance thus safeguards a debtor's ability to retain a car throughout the plan period. If the debtor already owns a car outright, he has no need for this protection. ”

“ Rather than authorizing all debtors to take deductions in all listed categories, Congress established a filter: A debtor may claim a deduction from a National or Local Standard table (like " [Car] Ownership Costs") if but only if that deduction is appropriate for him. And a deduction is so appropriate only if the debtor has costs corresponding to the category covered by the table—that is, only if the debtor will incur that kind of expense during the life of the plan. ”

“ The Code initially defines a debtor's disposable income as his "current monthly income . . . less amounts reasonably necessary to be expended." §1325 (b) (2) (emphasis added) . The statute then instructs that " [a] mounts reasonably necessary to be expended . . . shall be determined in accordance with" the means test. §1325 (b) (3) . Because Congress intended the means test to approximate the debtor's reasonable expenditures on essential items, a debtor should be required to qualify for a deduction by actually incurring an expense in the relevant category. ”

“ Such formulas are by their nature over- and under-inclusive. In eliminating the pre-BAPCPA case-by-case adjudication of above-median-income debtors' expenses, on the ground that it leant itself to abuse, Congress chose to tolerate the occasional peculiarity that a brighter-line test produces. And Ransom's alternative reading of the statute would spawn its own anomalies—even placing to one side the fundamental strangeness of giving a debtor an allowance for loan or lease payments when he has not a penny of loan or lease
page 17, slip opinion costs. ”

“ Expenses that are wholly fictional are not easily thought of as reasonably necessary. And finally, Ransom's interpretation would run counter to the statute’s overall purpose of ensuring that debtors repay creditors to the extent they can—here, by shielding some $28,000 that he does not in fact need for loan or lease payments. ”

“ Ransom first points out a troubling anomaly: Under our interpretation, " [d] ebtors can time their bankruptcy filing to take place while they still have a few car payments left, thus retaining an ownership deduction which they would lose if they filed just after making their last payment." Brief for Petitioner 54. Indeed, a debtor with only a single car payment remaining, Ransom notes, is eligible to claim a monthly ownership deduction. ”

“ If a debtor will not have a particular kind of expense during his plan, an allowance to cover that cost is not "reasonably necessary" within the meaning of the statute. [5]
Finally, consideration of BAPCPA's purpose strengthens our reading of the term "applicable." Congress designed
5 This interpretation also avoids the anomalous result of granting preferential treatment to individuals with above-median income. ”

“ Ransom appealed to the Ninth Circuit Bankruptcy Appellate Panel, which affirmed. In re Ransom, 380 B. R. 799, 808–809 (2007) . The panel reasoned that an "expense [amount] becomes relevant to the debtor (i.e., appropriate or applicable to the debtor) when he or she in fact has such an expense." Id., at 807. " [W] hat is important," the panel noted, "is the payments that debtors actually make, not how many cars they own, because [those] payments . . .are what actually affect their ability to" reimburse unse-
page 6, slip opinion cured creditors. ”

“ B Ransom filed for Chapter 13 bankruptcy relief in July 2006. App. 1, 54. Among his liabilities, Ransom itemized over $82,500 in unsecured debt, including a claim held by respondent FIA Card Services, N. A. (FIA) . Id., at 41. Among his assets, Ransom listed a 2004 Toyota Camry, valued at $14,000, which he owns free of any debt. Id., at 38, 49, 52. For purposes of the means test, Ransom reported in-
3 Although both components of the transportation allowance are listed in the Local Standards, only the operating-cost expense amounts vary by geography ”

“ Internal Revenue Manual §§5.15.1.7 and 5.15.1.8 (May 1, 2004) , reprinted in App. to Brief for Respondent 16a, 20a; see also IRS, Collection Financial Standards (Feb. 19, 2010) , http://www.irs.gov/individuals/article/0,,id=96543,00.html. ”