Another Reason the 2005 Bankruptcy Law is Unfair: Long Commutes from Leesburg

You may have already read about the “means test” put in the bankruptcy law in 2005. If you are over the median income for Virginia—$49,484 for single, no children; $85,586 for a family of four—you a presumed to be a “bankruptcy abuser.” You have to show the bankruptcy court why you can’t afford to pay.

For your means test budget—your “why I can’t afford to pay” budget—the court looks at what you really spend for some things. (Like childcare.) For other things you are assigned a budget number, whether it covers your real costs or not.

One of those assigned budget numbers is your monthly commuting expense. You are assigned $270.00 per month to cover your transportation operating costs. ($540.00 for husband and wife with two cars.)

That $270.00 per month is supposed to cover gasoline, tolls, tires, car maintenance and repairs, and car insurance. That number comes from the census bureau, and it’s calculated for the entire Washington DC metro area.

I’m sure you’ll agree with me that way of calculating is totally unfair. Somebody living in Arlington, who hops on the Metro to go downtown, gets $270.00 a month to cover the costs of running their car. Someone in Leesburg who has to drive 27 miles to Tyson’s Corner, gets the same $270.00.

(I should note here that the Congressman who represents Leesburg, Rep Frank Wolfe, was one of the people who voted for that law.)

I’ve done two thousand bankruptcies since that was put in the law in 2005. One of those was I able to get someone approved based on a higher commuting cost. That was a divorced woman with three children, who commuted every day from Leesburg into DC. I was able to show the court that she lived in Leesburg, because her mother lived in Leesburg. Mom watched the kids after school every day.

After a short fight, the enforcement people agreed with me that the extra commuting expense should count as part of the “child care.” And so her bankruptcy was approved.

This is an example of how I try to work around the unfair provisions for the 2005 bankruptcy law, to get bankruptcies approved.