§ 75.4     Acquired for Personal Use of Debtor
Cite as:    Keith M. Lundin, Lundin On Chapter 13, § 75.4, at ¶ ____, LundinOnChapter13.com (last visited __________).
[1]

The hanging sentence added to the end of § 1325(a)1 by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA)2 provides that § 506 shall not apply to an allowed secured claim provided for by the plan when the creditor has a purchase money security interest,3 the debt was incurred within 910 days preceding the petition and the collateral for the debt is a motor vehicle4 “acquired for the personal use of the debtor.”5 Put another way, the special protection of car lenders in the hanging sentence at the end of § 1325(a)6 only applies to a car acquired for the personal use of the debtor within 910 days of the petition.

[2]

The curious phrase “acquired for the personal use of the debtor” has quickly conjured a horde of reported decisions that agree on just about nothing about the meaning of this phrase. The closest point of agreement—that “acquired” fixes the correct temporal reference point as intention or purpose at the time the debtor purchased the car7—has been often recited but regularly finessed by the courts.

[3]

Comparing a couple of recent decisions will illustrate how good intentions with respect to “intention at the time of purchase” have collided with facts to make a mess of the temporal reference point in the hanging sentence. In In re Davis,8 18 months before the petition, the debtor bought a pickup. At the time of purchase, the debtor was studying to become a farrier and intended to use the pickup in his business. The debtor completed the farrier training program but went to work as a server at an Italian restaurant, working as a farrier part-time to supplement his income. The debtor used the pickup for transportation to and from the restaurant and to work as a farrier. A month before filing Chapter 13, the debtor lost his job at the restaurant and became a full-time farrier. At the petition, the pickup was used exclusively in the debtor’s farrier business.

[4]

Reciting that “the hanging paragraph requires the court to look at the purpose for which the Vehicle was acquired, not its present use[,]”9 the bankruptcy court rejected the undisputed “business purpose” at the petition in favor of finding that the pickup was “acquired for the personal use of the debtors” 18 months before the petition. As explained by the court, “[t]here is simply no evidence that Mr. Davis operated a business until after the Petition Date, and the Vehicle was purchased approximately 18 months prior [to] that date.”10 Davis seems to say that business use of the pickup at the petition was not convincing of the debtor’s intent 18 months earlier notwithstanding that the debtor was studying to enter that business at the time the pickup was purchased.

[5]

There are examples of just the opposite logic. In In re LaDeaux,11 the debtor acquired a large motor vehicle and claimed that the large vehicle was purchased to transport foster children—a business purpose, not a personal use.12 In line with Davis, the bankruptcy court in LaDeaux recited, “[I]t is uniformly accepted that the debtor’s intended use at the time the vehicle was purchased should be examined to determine whether the ‘hanging paragraph’ applies to a particular secured claim.”13 But the bankruptcy court in LaDeaux applied the principle that “[t]he debtor’s actual usage of the vehicle in question is persuasive evidence of the debtor’s actual intent at the time of acquisition.”14 After acquiring the large motor vehicle, the debtor in LaDeaux generated income by hauling around foster children. The court found that 20 percent of the debtor’s income was earned from the foster care business and this evidence reflected backwards to demonstrate business use intent at the time of acquisition.15

[6]

Once you get beyond the temporal uncertainty, there is mostly disagreement about the meaning of acquired for the personal use of the debtor. First, there is the question, who is the “debtor” for whose personal use the car was acquired? The spouses of married debtors are sometimes joint debtors and sometimes not. For many other purposes, BAPCPA made important distinctions between the “debtor” and the “debtor’s spouse,” even when the spouse is a joint debtor.16 Applying the rule of construction in § 102(7) that the singular includes the plural, the bankruptcy court in In re Vagi17 concluded “the hanging paragraph applies to motor vehicles purchased by a debtor for the personal use of his or her co-debtor.”18 In contrast, in In re Press,19 when only Barry Press was liable to the car lender but the car was purchased for the personal use of co-debtor Alicia Press, the bankruptcy court held that § 102(7) does not change the requirement in the hanging sentence that “personal” means the individual who acquired the car:

[T]he omission of “family or household” from the hanging paragraph means as a matter of statutory construction that the phrase “personal use” standing alone has a different meaning. . . . There is no implication in the plain meaning of the word “personal” in this context that includes the concepts of “family” or “household,” and there is nothing in the plain meaning of the statute that allows [the car lender] to pull Barry Press under a penumbra cast by his wife, Alicia Press, such that a car acquired for her “personal use” is transmuted into a car acquired for anyone other than her. . . . [W]hether or not Barry Press may have made use of the car is irrelevant under the statute, which speaks only in terms of a car “acquired for the personal use of the debtor.” . . . [O]nce the car was acquired for the personal use of Alicia Press, incidental or even frequent use by Barry Press is not a consideration . . . . Only Barry Press is a debtor to [the car lender] under the secured car loan. The filing of a joint petition by husband and wife under 11 U.S.C. § 302 does not create a single, substantively consolidated estate.20
[7]

Interesting facts rewarded the tag team approach in In re Beasley.21 The debtor and the debtor’s spouse were both liable for a car loan. The car was purchased for the wife’s use and replaced a car that was exclusively used by the wife. The husband and wife in Beasley filed separate Chapter 13 cases on the same day. The wife’s plan provided that the car claim would be paid by the husband’s plan. The car lender (Citifinancial) did not object to confirmation of the wife’s plan. The husband’s plan proposed to value the car and cram down the car lender’s claim because the car had been acquired for the personal use of the wife, not the husband. The bankruptcy court rejected Citifinancial’s hanging-sentence objection to the husband’s plan:

At the time of the acquisition, the car was acquired solely for the wife’s use. The Debtor has testified that he has never driven the vehicle or used it for his own purposes. . . . Creditor could have objected to confirmation of the Wife’s plan because the car was acquired for her personal use if it contended that her plan was filed in bad faith. . . . Congress must be presumed to know what it is doing when it passes legislation. Debtors’ taking advantage of an apparent loophole in the legislation is not necessarily bad faith.22
[8]

Nonfiling spouses have produced only slightly less disagreement about the meaning of personal use in the hanging sentence. Citing the omission of “family and household,” the bankruptcy court in In re Adams23 took the majority position that a car acquired by the debtor for use by a nonfiling spouse is not protected from § 506 by the hanging sentence at the end of § 1325(a):

When he purchased the vehicle, Debtor intended that his wife would be the primary user. Debtor’s wife, in fact, was the primary user. Debtor’s wife was listed as the sole driver on the vehicle’s insurance policy. . . . [T]he omission of “family and household” use from the hanging paragraph demonstrates that Congress intended “personal use” standing alone to have a different meaning. . . . [T]he vehicle must have been acquired for the use of a particular person—Debtor—for the paragraph to apply.24
[9]

In contrast, the bankruptcy court in In re Solis25 refused to rule out the possibility that a car purchased by the debtor for use by a nonfiling spouse could be acquired for the personal use of the debtor. Expressing palpable angst over the difficulty of applying the personal use condition, the Solis court gave this broader view of the reach of the hanging sentence:

[I]f the vehicle was acquired for the exclusive use of a person other than the debtor, then the hanging paragraph does not apply. However, . . . if the “other person” is debtor’s spouse, then the question is more problematic since use by debtor’s spouse may use the vehicle for the benefit of the debtor, debtor’s family, and debtor’s household. This latter use might, depending on all the facts and circumstances, be “use of” the debtor. . . . [T]he hanging paragraph does not use the words “solely”, “exclusively”, “mostly”, “primarily”, “partially” or any other bright line . . . . “Personal” use and “family or household” use are not different or mutually exclusive. The chapter 13 debtor is always a person, and when the debtor has a family it would be virtually impossible to distinguish “family” use from “personal” use. . . . “[P]ersonal use” includes any use of the vehicle that benefits the debtor(s) . . . . “[D]ebtor” means that person(s) who filed the bankruptcy case, not the person(s) who signed the retail purchase agreement.26
[10]

The Solis court concluded that a vehicle purchased “for all the myriad of uses that a typical American husband and wife make of their sole vehicle” is acquired for personal use of the debtor notwithstanding that only one spouse is a debtor in the Chapter 13 case.

[11]

The Solis discussion would extend hanging-sentence protection to a car purchased for any family member, but the Solis opinion states that a car purchased in the debtor’s name to accommodate the debtor’s son was not acquired for the personal use of the debtor. So far, the reported decisions agree and have refused to stretch the notion of personal use in the hanging sentence to reach adult children, parents or fiancés.27

[12]

Digging deeper than the intended user of the car, things get more complicated as the hanging-sentence cases search for a test for “personal use.” A handful of sometimes overlapping and sometimes conflicting tests have emerged in reported decisions.

[13]

A few courts have flirted with but not adopted the IRS notion of business versus personal use. As explained by the bankruptcy court in In re White,28 for income tax purposes, IRS guidelines provide that cars used for transportation to and from work are not “business property” and expenses to purchase and maintain such a car are not deductible business expenses.29 In re Wilson30 notes the “interesting question” whether Congress intended bankruptcy practitioners to rely on IRS guidelines to determine the meaning of “personal” use in the hanging sentence, given the substantial reliance by Congress on IRS guidelines within the abuse test in § 707(b).31 As if in response, the bankruptcy court in In re Medina32 rejected tax definitions of personal use for hanging-sentence purposes because of § 707(b):

The Court must assume that Congress knew what they were saying when the amendment was drafted. If Congress wanted Courts to use the IRS definition of personal use it could easily have added that language. Clearly Congress knows how to integrate IRS standards into the Bankruptcy Code because it specifically did so in 11 U.S.C. § 707(b)(2)(A)(ii)(I).33
[14]

The bankruptcy courts in In re Counts34 and In re Garrison35 cited evidence that the debtors deducted vehicle expenses on their tax returns in support of the conclusion that the hanging sentence did not apply. The bankruptcy court in In re Powell36 was unconvinced that the mileage log the debtor kept for federal tax purposes proved business rather than personal use for a Lincoln Town Car. Perhaps the most that can be said is that tax treatment is sometimes considered by courts as evidence bearing on whether a car satisfies the personal use requirement, but tax considerations are rarely controlling.

[15]

A second candidate for the meaning of personal use in the hanging sentence is the “profit motive” test explained in In re Phillips:37

The Fourth Circuit Court of Appeals has previously advanced its interpretation of the term “personal use,” albeit in the different bankruptcy statutory context of Section 722 . . . in [Cypher Chiropractic Center v. Runski (In re Runski), 102 F.3d 744 (4th Cir. 1996)]. In so doing, the decision there viewed the phraseology of Section 722 of “personal, family, or household use” as representing three categories of goods subject to some degree of possible overlap but critically concluding the term “personal use” was use of a nonbusiness nature without profit motive. . . . [T]he requirement of “personal use” found in the “hanging paragraph” of Section 1325 means use of a vehicle for a non-business or non-profit making purpose. . . . Phillips attempts to distinguish the usage of her vehicle for transportation of her family as a “family” or “household” use and not as a personal use. However, as noted in Runski, some types of property have overlapping uses . . . . A motor vehicle . . . is a category of property that may be acquired for multiple uses, and in this instance, the use of the Automobile is for non-business purposes. . . . [T]ransportation of her family members is not so distinct from the use of the debtor for “personal use.”38

There has been no avalanche of support in the reported decisions for this “profit motive” test.

[16]

There are other approaches to the meaning of personal use in the hanging sentence that have garnered measurable support in the early reported decisions. Several relevant opinions adopt a “totality of circumstances” test that (ambiguously) considers actual use of the car—in addition to intent at the time of acquisition—and gives particular weight to whether use of the car has significantly contributed to income. As explained by the bankruptcy court in In re Johnson:39

[T]he issues should be determined by the “totality of circumstances” approach. . . . [T]he court must examine the extant circumstances . . . as of the date the vehicle was acquired. . . . [A] substantial factor in considering the totality of the circumstances is whether the acquisition of the vehicle enabled the debtor to make a significant contribution to the gross income of the family unit.40

Courts applying this “totality of the circumstances/significant contribution” test are somewhat more likely to find a car was not acquired for personal use when the car contributes to income by enabling a debtor to drive to and from work.41

[17]

Perhaps a plurality of courts have applied a “significant and material” test for personal use originated by the Bankruptcy Court for the Southern District of Texas.42 This test also claims to consider the “totality of circumstances” but from a different perspective than the “significant contribution to income” cases just discussed. The decision launching this test, In re Solis,43 is remarkable for its honesty about the difficulty of formulating a practical test for personal use, and the test that emerges is a challenging collection of unresolved possibilities:

[T]he “personal use” requirement of the statute is satisfied if the acquirer intended a debtor’s personal use to be significant and material. . . . “[P]ersonal” implies “non-business”. . . . [A] vehicle acquired exclusively for business use is not a vehicle acquired for personal use. But . . . there is no guidance in the statute concerning what percentage of business use (less than 100%) would disqualify the vehicle . . . . [T]he “personal use” requirement of the statute is satisfied if the personal use of the debtor is significant and material, regardless of whether there is also some business use. . . . “Personal” use and “family or household” use are not different or mutually exclusive. The chapter 13 debtor is always a person, and when the debtor has a family it would be virtually impossible to distinguish “family” use from “personal” use. . . . “[P]ersonal use” includes any use of the vehicle that benefits the debtor(s) . . . . “[P]ersonal use” includes transportation to and from work . . . . “Use” of a vehicle is not limited to driving it . . . . This Court will test “use” by testing “for whose benefit” the vehicle was intended to be used, not solely by considering who was intended to manipulate the controls.44
[18]

Then there are a handful of decisions that apply more than one of the approaches just described, a few that create hybrids of these approaches and a case or two that simply defy characterization.45 The proliferation of methodologies is proof that there will be a long road to consensus about the meaning of personal use in the hanging sentence.

[19]

There are significant and subtle differences among the tests outlined above. In particular, driving to and from work tends to produce different outcomes with respect to personal use when a court applies the “significant contribution to income” test as opposed to the “significant and material” test. Courts applying the contribution to income approach more easily conclude that driving to and from work contributes income and is not personal use.46 Courts applying the “significant and material” test and the “profit motive” test more often find that driving to and from work is a personal use.47 The U.S. District Court for the Western District of Louisiana has offered the following “bright line” dividing personal use and business use at the office door:

[O]ur society—for reasons not relevant to this opinion—has determined that the “bright line” designating personal time as opposed to business time is drawn at the door of the office; that is, before one arrives at work, one’s time and one’s assets are one’s own, but once one steps into the office and “on the clock,” one’s time is not one’s own. . . . [T]he relevant inquiry for purposes of defining the term “personal use” as opposed to “business use” . . . is: (1) whether the individual is using the vehicle to travel to and from work, or (2) whether the vehicle is actually utilized in the performance of the individual’s job duties. In other words, is the vehicle used to get to one’s work or to do one’s work once there. . . . Ms. Johnson was using the vehicle to travel to and from work, and Ms. Johnson did not utilize the vehicle in the performance of her job duties once at work. . . . Ms. Johnson acquired the vehicle for her “personal” use.48
[20]

Facts are important to the meaning of “personal use” in the hanging sentence. Though not always confessed, many decisions cited above consider evidence of actual use of a car as evidence bearing on intended use at the time of acquisition. That an employer requires the debtor to drive to and from work—or more powerfully, requires the debtor to use a personal car at work—is evidence that the car was not acquired for personal use. As the debtors learned the hard way in In re Fletcher,49 photographs showing a watermelon and a beach chair in the backseat of a pickup can overcome testimony that the pickup was acquired to transport pallets in the debtor’s business.

[21]

Courts finding that “personal use” includes some business use threaten to drain personal use of meaning separate from use that is not personal. That Congress omitted “family and household” from the hanging sentence supports the argument that personal use has a different intended meaning, but the lines between personal, family and household are hardly clearer than the lines between personal and business use. That most car purchase contracts contain a check box for “personal, family or household” use has been cited as evidence bearing on the personal use determination but has rarely carried the day.50

[22]

There is plenty of grist here for litigation. Successful proof that a car was not acquired for personal use significantly affects the economics of a Chapter 13 case by removing a car claim from the protection of the hanging sentence and subjecting the debt to bifurcation and cramdown.51

[23]

Though not beyond dispute, it seems likely that the personal use condition in the hanging sentence applies only to the motor vehicle portion of the sentence. Detailed elsewhere,52 the hanging sentence provides that § 506 shall not apply to debts incurred within 910 days of the petition when the collateral consists of a motor vehicle “acquired for the personal use of the debtor” or if the collateral for that debt “consists of any other thing of value” if the debt was incurred within one year of the petition.53 The phrase “personal use of the debtor” appears immediately after “a motor vehicle” and, to date, no reported decision has applied the personal use condition to collateral other than a motor vehicle.54

[24]

On the other hand, because the phrase “any other thing of value,” defines “collateral for that debt,” the hanging sentence could be distorted to impose the personal use condition on all collateral for a debt that falls within the hanging sentence. A more natural reading of the hanging sentence allows the purchase money condition to apply to both kinds of collateral without also applying the personal use condition beyond its closest association—motor vehicle collateral.55


 

1  11 U.S.C. § 1325(a), discussed in § 451.1 [ In General: Modification Without § 506 ] § 75.1  In General: Modification Without § 506.

 

2  Pub. L. No. 109-8, 119 Stat. 23 (2005).

 

3  See § 451.3 [ Only PMSIs Need Apply ] § 75.3  Only PMSIs Need Apply.

 

4  See § 451.2 [ Motor Vehicles and Any Other Thing of Value ] § 75.2  Motor Vehicles and Any Other Thing of Value.

 

5  Hanging sentence at the end of 11 U.S.C. § 1325(a). The hanging sentence also applies when the collateral for the debt consists of “any other thing of value” and the debt was incurred during the year preceding the petition. See § 451.2 [ Motor Vehicles and Any Other Thing of Value ] § 75.2  Motor Vehicles and Any Other Thing of Value.

 

6  See § 451.1 [ In General: Modification Without § 506 ] § 75.1  In General: Modification Without § 506.

 

7  See In re Solis, 356 B.R. 398, 409 (Bankr. S.D. Tex. 2006) (“[T]he appropriate test is the intention of the purchaser at the time that the vehicle was acquired.”); In re Hill, 352 B.R. 69, 72 (Bankr. W.D. La. 2006) (“For the anti-cramdown provision to apply, the motor vehicle must have been ‘acquired’ for the personal use of the debtor. . . . [T]he court must examine the extant circumstances . . . as of the date the vehicle was acquired.”); In re Johnson, 350 B.R. 712, 716 (Bankr. W.D. La. 2006) (“[T]he court must examine the extant circumstances . . . as of the date the vehicle was acquired.”), rev’d on other grounds, No. 06-2175, 2007 WL 2702193 (W.D. La. Sept. 11, 2007) (unpublished) (Doherty).

 

8  In re Davis, No. 07-50648, 2007 WL 2818493, at *2 (Bankr. M.D.N.C. Sept. 25, 2007) (unpublished) (Carruthers).

 

9  2007 WL 2818493, at *2.

 

10  2007 WL 2818493, at *2.

 

11  373 B.R. 48 (Bankr. S.D. Ohio 2007) (Preston).

 

12  See below in this section for further discussion of “business purposes” versus “personal use.”

 

13  373 B.R. at 51.

 

14  373 B.R. at 51.

 

15  See also In re Pearson, No. 07-00478-5-ATS, 2008 WL 687058, at *1 (Bankr. E.D.N.C. Mar. 7, 2008) (Small) (“[U]se as of the petition date is irrelevant to whether the hanging paragraph applies.” Car acquired for personal use of someone other than the debtor was not acquired for the personal use of the debtor notwithstanding that the car became the debtor’s personal means of transportation after acquisition and before the Chapter 13 petition.); In re Bethoney, 384 B.R. 24, 29, 31 (Bankr. D. Mass. 2008) (Hillman) (“[T]he analysis must start with the debtor’s intent at the date of acquisition and not actual use.” When there was “little evidence” of the debtor’s personal use after acquisition of car, debtor failed to carry burden of proof with respect to “debtor’s intended use . . . when she acquired the vehicle.”); In re Matthews, 378 B.R. 481, 490–91 (Bankr. D.S.C. 2007) (Waites) (“Intent, at the time of purchase, is the touchstone for determining if a vehicle was purchased for personal use. . . . A debtor’s actual use of the vehicle is often a reflection of the intended use of the vehicle.” Evidence that the debtor bought a car big enough to transport the debtor’s mother’s wheelchair and that the debtor used the larger car to drive her mother to doctor’s appointments and the like was credible evidence that the car was not purchased for personal use.); In re Cross, 376 B.R. 641, 648 (Bankr. S.D. Ohio 2007) (Although “it is ‘the intention of the acquirer at the date of acquisition[ ]’ that is controlling,” that the evidence showed the debtor and the debtor’s nonfiling spouse both used the Cadillac as a family vehicle on weekends after it was acquired overcame testimony that the car was acquired for the nonfiling spouse.); In re Fletcher, No. 07-10597-BKC-RBR, 2007 WL 1804931, at *3 (Bankr. S.D. Fla. June 19, 2007) (unpublished) (Ray) (Although “it is the intention of the debtor at the time of acquisition that is important,” evidence that the pickup had a rear seat DVD player and pictures showing a watermelon and a beach chair in the backseat were inconsistent with debtor’s testimony that the pickup was acquired for use in the debtor’s business.); In re Martinez, 363 B.R. 525, 527 (Bankr. S.D. Tex. 2007) (“Totality of the circumstances” determines whether car was acquired for personal use—including the “substantial factor . . . whether the acquisition of the vehicle enabled the debtor to make a significant contribution to the gross income of the family unit.”).

 

16  See, e.g, 11 U.S.C. § 101(10A), discussed in §§ 379.1 [ Form B22C: Statement of Current Monthly Income ] § 36.19  Form 122C-1: Statement of Current Monthly Income, 468.1 [ Current Monthly Income: The Baseline ] § 92.3  Current Monthly Income: The Baseline and 473.1 [ Accounting for Spouses ] § 94.3  Accounting for Spouses.

 

17  351 B.R. 881 (Bankr. N.D. Ohio 2006).

 

18  351 B.R. at 885.

 

19  No. 06-10978 BKC JKO, 2006 WL 2734335 (Bankr. S.D. Fla. July 26, 2006) (unpublished) (Olson).

 

20  2006 WL 2734335, at *2–*3.

 

21  No. 07-40280 JTL, 2007 WL 2986124 (Bankr. M.D. Ga. Oct. 9, 2007) (unpublished) (Laney).

 

22  2007 WL 2986124, at *2–*3.

 

23  No. 06-51651 RFH, 2007 WL 675958 (Bankr. M.D. Ga. Mar. 1, 2007) (unpublished) (Hershner).

 

24  2007 WL 675958, at *3–*4. Accord In re Pearson, No. 07-00478-5-ATS, 2008 WL 687058, at *2 (Bankr. E.D.N.C. Mar. 7, 2008) (Small) (Car purchased for personal use of nonfiling (estranged) spouse was not acquired for personal use of debtor notwithstanding that car became debtor’s personal means of transportation after acquisition and before Chapter 13 petition. “Ms. Pearson did not acquire the vehicle for her personal use, but rather, the vehicle was acquired for her husband’s use. Consequently, the hanging paragraph of § 1325(a) does not apply.”); In re Smith, No. 07-30201, 2007 WL 1577668 (Bankr. S.D. Tex. May 29, 2007) (unpublished) (Isgur) (Car purchased for nonfiling spouse was not purchased for personal use of debtor notwithstanding that nonfiling spouse transported debtor’s biological grandchild. Nonfiling spouse picked out car and negotiated terms of car note, and debtor participated only to facilitate trade-in and to enhance nonfiling spouse’s credit. Nonfiling spouse exclusively drove car, debtor did not have key to car and payments were made by nonfiling spouse. Nonfiling spouse used car to transport and care for debtor’s three-year-old grandson.); In re Adaway, 367 B.R. 571 (Bankr. E.D. Tex. 2007) (Car acquired for personal use of nonfiling spouse was not acquired for personal use of debtor.); In re Davis, No. 06-10461-DHW, 2006 WL 3613319, at *2 (Bankr. M.D. Ala. Dec. 8, 2006) (unpublished) (Williams) (Car purchased for use by debtor’s nonfiling spouse was not purchased for personal use of debtor and is not protected from bifurcation by hanging sentence at end of § 1325(a). Debtor and husband were comakers on note to purchase car that was used by nonfiling husband only to drive to and from work. Debtor did not have keys for car driven by husband. “[F]or the provisions of the § 1325(a) hanging paragraph to apply, the vehicle must have been purchased for the ‘personal use of the debtor.’ In this case, as in [In re Morris, Case No. 06-10251 (Bankr. M.D. Ala. Aug. 15, 2006)], the vehicle was purchased for another’s use, hence that provision of the statute is inapplicable.”); In re Jackson, 338 B.R. 923, 926 (Bankr. M.D. Ga. 2006) (Car purchased for personal use of nonfiling spouse is not protected by hanging sentence at the end of § 1325(a). “[W]hen Congress wants to include family or household use within the scope of a statute, it knows how to do so. . . . [T]he omission of ‘family and household’ use from the hanging paragraph demonstrates that Congress intended ‘personal use’ standing alone to have different meaning. . . . [T]he vehicle must have been acquired for the use of a particular person—Debtor—for the hanging paragraph to apply. . . . [T]he Grand prix was purchased to replace Debtor’s wife’s previous car . . . she has at all times been the primary driver . . . . Because the Grand Prix was not acquired for Debtor’s personal use, the hanging paragraph does not apply to Nissan’s claim.”).

 

25  356 B.R. 398 (Bankr. S.D. Tex. 2006).

 

26  356 B.R. at 409–11. Accord In re Cross, 376 B.R. 641, 648 (Bankr. S.D. Ohio 2007) (Applying In re Solis, 356 B.R. 398 (Bankr. S.D. Tex. 2006), car was acquired for personal use of debtor notwithstanding testimony that car was acquired for nonfiling spouse. “[B]oth the Debtor and Mrs. Cross use the Cadillac as their family vehicle on weekends. . . . The story that unfolded from the testimony at the Hearing was that of a typical family with multiple vehicles used by both husband and wife interchangeably as necessary and practical under the circumstances.”).

 

27  See, e.g., In re Geddes, No. 308-00713, 2008 WL 4490113, at *2–*3 (Bankr. M.D. Tenn. June 17, 2008) (Paine) (Car purchased for exclusive use of adult daughter that debtor has never driven and does not have a key for was not acquired for debtor’s personal use. “‘[W]hen Congress wants to include family or household use within the scope of a statute, it knows how to do so. . . . [T]he omission of ‘family and household’ use from the hanging paragraph demonstrates that Congress intended ‘personal use’ standing alone to have a different meaning. . . . [T]he vehicle must have been acquired for the use of a particular person—Debtor—for the hanging paragraph to apply. . . . [T]he debtor purchased the car, not for herself, but for her adult daughter. The car was titled at the adult daughter’s address. The debtor has never driven the car and does not have a key to the car.”); In re Ford, No. 07-28188-svk, 2008 WL 1925153, at *4 (Bankr. E.D. Wis. Apr. 29, 2008) (Kelley) (Car acquired for use of debtor’s fiancée was not acquired for personal use of debtor. “[B]y giving meaning to all of the words within the hanging paragraph (personal use of the debtor), but being careful not to add words that are not there (personal, family or household use), this Court holds that the Debtor’s Maxima does not qualify for 910-day treatment because the Debtor acquired it for the personal use of his fiancée.”); In re Matthews, 378 B.R. 481 (Bankr. D.S.C. 2007) (Waites) (Car acquired jointly by debtor and debtor’s mother that was big enough to transport mother’s wheelchair was not acquired for personal use of debtor.); In re Lewis, 347 B.R. 769, 773 (Bankr. D. Kan. 2006) (Car purchased for use by debtors’ adult child was not acquired for personal use of debtors and does not fall within hanging sentence. “While this Court might consider the phrase ‘acquired for the personal use of the debtor’ to be flexible enough to include a vehicle a debtor acquired for his or her spouse to use . . . the Court is convinced the phrase cannot reasonably be stretched to include a vehicle acquired for the use of an independent adult child who does not live with the debtor.” Plan that crammed down debt secured by car used by adult child was not proposed in good faith and could not be confirmed.). See also In re Smith, No. 06-20127, 2007 WL 1544366 (Bankr. E.D. Wis. May 29, 2007) (unpublished) (Pepper) (Confirmed plan that clearly indicated car was used by debtor’s fiancée and thus was subject to bifurcation and stripdown is binding on car lender that failed to object; court did not reach issue whether personal use included use by fiancée.).

 

28  352 B.R. 633 (Bankr. E.D. La. 2006).

 

29  352 B.R. at 641 (Citing C.F.R. § 1.262-1(b)(5), “[u]nder Federal law, Internal Revenue Service guidelines provide that vehicles used for transportation to and from work are not business property and therefore expenses associated with their purchase and maintenance are not deductible as business expenses for income tax purposes. Taxpayers who use their vehicles both for business and personal reasons may deduct a mileage per diem or a percentage of expenses incurred for their upkeep or operation based on total relative use for business.”). See also In re Wilson, No. 06-40637, 2006 WL 3512921, at *3 n.14 (Bankr. D. Kan. Dec. 5, 2006) (unpublished) (Karlin) (noting that In re White, 352 B.R. 633 (Bankr. E.D. La. 2006), declined to find that Congress adopted Internal Revenue Service guidelines to interpret hanging sentence in § 1325(a)).

 

30  2006 WL 3512921 (Bankr. D. Kan. Dec. 5, 2006) (unpublished) (Karlin).

 

31  2006 WL 3512921, at *3 n.14. See §§ 475.1 [ National Standards ] § 95.2  National Standards and 476.1 [ Local Standards: Housing and Transportation ] § 95.3  Local Standards: Housing and Transportation for discussion of IRS Standards in the calculation of projected disposable income.

 

32  362 B.R. 799 (Bankr. S.D. Tex. 2007).

 

33  362 B.R. at 802.

 

34  No. 07-60542-13, 2007 WL 2669204 (Bankr. D. Mont. Sept. 6, 2007) (unpublished) (Kirscher).

 

35  No. A06-00396-DMD, 2007 WL 1589554 (Bankr. D. Alaska June 1, 2007) (unpublished) (MacDonald).

 

36  No. 08-82538, 2009 WL 910407 (Bankr. C.D. Ill. Apr. 1, 2009) (Perkins).

 

37  362 B.R. 284 (Bankr. E.D. Va. 2007).

 

38  362 B.R. at 303–04.

 

39  350 B.R. 712 (Bankr. W.D. La. 2006), rev’d, No. 06-2175, 2007 WL 2702193 (W.D. La. Sept. 11, 2007) (unpublished) (Doherty).

 

40  350 B.R. at 715–16. Accord In re LaDeaux, 373 B.R. 48, 52–53 (Bankr. S.D. Ohio 2007) (“[T]he vehicle enables the Debtors to make a significant contribution to their income. . . . [T]wenty percent of the Debtors’ total monthly income. . . . [T]he vehicle is used to perform the functions of a business, foster care. . . . [I]t is . . . akin to a day-care business or working as a nanny . . . . [T]here is no evidence that the Toyota is used for any of the purposes that are the hallmarks of personal usage.”); In re Martinez, 363 B.R. 525, 527 (Bankr. S.D. Tex. 2007) (“[T]his Court believes that the totality of the circumstances/significant contribution test best utilizes the Hanging Paragraph. . . . If Congress wanted Courts to use the IRS definition of personal use it could easily have added that language. . . . The court also rejects the interpretation that a vehicle is acquired for personal use if that use is ‘significant and material.’ . . . The Court holds that ‘a substantial factor in considering the totality of the circumstances is whether the acquisition of the vehicle enabled the debtor to make a significant contribution to the gross income of the family unit. If it did, then this court concludes that the vehicle was not “acquired for the personal use of the debtor.”’ . . . [T]he Vehicle was not acquired for personal use because from the time of purchase, Mr. Martinez used the vehicle for transportation to and from his employment and for work-related errands. The Vehicle allowed Mr. Martinez to make a significant contribution to the family’s gross income, which he could not have made without use of the vehicle. . . . Accordingly, . . . the Vehicle was not acquired for the personal use of the Debtors.”); In re Medina, 362 B.R. 799 (Bankr. S.D. Tex. 2007) (Applying “totality of the circumstances/significant contribution test” and rejecting IRS definition and “significant and material” use test, “the Court finds that the Vehicle was not acquired for personal use because from the time of purchase, Melissa Medina used the vehicle for transportation to and from her employment. The Vehicle allowed Ms. Medina to make a significant contribution to the family’s gross income, which she could not have made without use of the vehicle. . . . Accordingly, . . . the Vehicle was not acquired for the personal use of the Debtors.”); In re Hill, 352 B.R. 69, 72–74 (Bankr. W.D. La. 2006) (Applying “totality of circumstances,” car was not acquired for personal use when debtor uses car to get to and from work. “For the anti-cramdown provision to apply, the motor vehicle must have been ‘acquired’ for the personal use of the debtor. . . . [T]he court must examine the extant circumstances . . . as of the date the vehicle was acquired. . . . Mrs. Hill . . . is required by her employment to have a vehicle in order to get to and from work. She is not required to have a vehicle during the course of her day at her employment. . . . [S]he drives the truck to and from work and sometimes her husband drives her to work and uses the vehicle for personal family purposes and picks her up from work at the end of the day. . . . [T]he use of the vehicle is mixed, both personal and business. By ‘business use,’ the court includes the utilization by the Debtors in generating income for their maintenance and support. . . . Considering the totality of the circumstances, the court concludes that the vehicle . . . was not acquired for the personal use of the debtor.”).

 

41  See below in this section.

 

42  As demonstrated above and below in this section, the bankruptcy judges in the Southern District of Texas are not in agreement with respect to the test for personal use in the hanging sentence.

 

43  356 B.R. 398 (Bankr. S.D. Tex. 2006).

 

44  356 B.R. at 409–11. Accord In re Bethoney, 384 B.R. 24, 30–31 (Bankr. D. Mass. 2008) (Hillman) (Applying personal use analysis from In re Solis, 356 B.R. 398 (Bankr. S.D. Tex. 2006), debtor failed to prove that car was not acquired for personal use. “Adopting a totality of circumstances test in which the ‘personal use’ requirement, defined as encompassing both ‘family’ and ‘household’ uses, is satisfied when the debtor’s use is ‘significant and material’ balances Congress’ clear intent that the debtor’s use be ‘non-business’ with the practical realities that face Chapter 13 debtors. . . . [T]here is little evidence as to the Debtor’s ‘personal use’ . . . . [M]y determination must rest on the burden of proof. . . . I have no evidence as to what the Debtor’s intended use was when she acquired the Vehicle. . . . [T]he Debtor has not carried her burden and I find the ‘hanging paragraph’ applicable.”); In re Matthews, 378 B.R. 481, 490–91 (Bankr. D.S.C. 2007) (Waites) (Applying totality of circumstances test from In re Solis, 356 B.R. 398 (Bankr. S.D. Tex. 2006), car acquired jointly by debtor and debtor’s mother that was big enough to transport mother’s wheelchair was not acquired for personal use of debtor. “Debtor testified that she purchased the Pacifica for her mother’s transportation. . . . [T]he Pacifica was necessary because it is large enough to transport the mother’s wheelchair. Debtor further testified that she did not need the Pacifica for her use. . . . [T]he Court cannot conclude that the Pacifica enhanced Debtor’s ability to satisfy her personal wants and needs. The Pacifica appears to have been purchased to enable Debtor to transport her mother to doctor’s appointments, a use personal to her mother but not necessarily to Debtor. . . . A debtor’s actual use of the vehicle is often a reflection of the intended use of the vehicle. . . . [A] debtor need not use or have intended to use a vehicle ‘solely’ or ‘primarily’ for non-personal use in order for the vehicle to be considered as having been acquired for non-personal use. . . . [T]he Court cannot find any personal use by Debtor was significant and material considering that Debtor had another new vehicle of equal age at her disposal for her personal use and Debtor’s credible testimony that the Pacifica was not purchased for her personal use.”); In re Gonzales, No. 07-50202-RLJ-13, 2007 WL 3217671 (Bankr. N.D. Tex. Oct. 29, 2007) (unpublished) (Jones) (Applying In re Solis, 356 B.R. 398 (Bankr. S.D. Tex. 2006), pickup used 95% in debtor’s dry wall business was not acquired for personal use and is not protected from § 506(a).); In re Cross, 376 B.R. 641, 647–48 (Bankr. S.D. Ohio 2007) (Applying In re Solis, 356 B.R. 398 (Bankr. S.D. Tex. 2006), car was acquired for personal use of debtor notwithstanding testimony that car was acquired for nonfiling spouse. “The ‘significant-and-material’ test outlined in Solis requires a debtor to meet the burden of showing that he did not acquire the car for significant and material personal uses. . . . [I]t is ‘the intention of the acquirer at the date of acquisition[ ]’ that is controlling. . . . [B]oth the Debtor and Mrs. Cross use the Cadillac as their family vehicle on weekends. . . . The story that unfolded from the testimony at the Hearing was that of a typical family with multiple vehicles used by both husband and wife interchangeably as necessary and practical under the circumstances.”); In re Fletcher, No. 07-10597-BKC-RBR, 2007 WL 1804931, at *3–*4 (Bankr. S.D. Fla. June 19, 2007) (unpublished) (Ray) (Applying “significant and material” test, debtor failed to prove that pickup was not acquired for personal use; debtor testified that he used pickup to run personal errands, and options package included rear seat DVD player that was inconsistent with business purposes. “[T]he Debtor has the burden of proving that the hanging paragraph is inapplicable if they [sic] are to be successful on a § 506(a) motion. . . . [I]t is the intention of the debtor at the time of acquisition that is important. . . . In many cases the best evidence will be the box checked on the contract, the application for credit, what type of insurance the car has, or some other indicator that occurred at, or close to, the time of purchase. . . . Under the ‘significant and material’ test, the Debtor has the burden of showing that he did not acquire the car for ‘significant and material’ personal uses. . . . There are several factors . . . (a) transportation that satisfies personal wants (i.e. recreation); (b) transportation that satisfies personal needs (i.e. shopping or running errands); (c) transportation that satisfies family or personal obligations (i.e. trips to the doctor); (d) commuting to and from work, unless there is truly no other alternative. . . . [T]his Court will also consider the options purchased on the truck. Under this test the Debtor has failed to meet his burden. He testified that he used the truck to run personal errands. He testified that he had taken the truck to the beach. . . . [O]ne of the photographs shows a watermelon and beach chair in the back seat. Most importantly, the Debtor testified that the truck’s primary business use was to move palettes [sic]. However, the truck also has several options on it. Most notoriously, rear seat DVD players. The Court does not believe that palettes of software are capable of watching DVD. . . . The ‘totality of the circumstances’ test is somewhat different. Under this test the debtor is required to prove that the vehicle ‘enabled the debtor to make a significant contribution to the gross income of the family unit.’ . . . Under this test, the Debtor would prevail because he does use the car to commute to work. He also transports work related items on the truck. However, the Court declines to adopt this test.”); In re Smith, No. 07-30201, 2007 WL 1577668, at *3–*4 (Bankr. S.D. Tex. May 29, 2007) (unpublished) (Isgur) (“This Court agrees with [In re Solis, 356 B.R. 398 (Bankr. S.D. Tex. 2006),] and finds that the totality of circumstances test must be applied to determine when the non-debtor spouse’s use of a vehicle is personal to the debtor. In considering the principles that (1) income from a debtor may be personal to his family, and (2) ‘use’ is best tested by determining ‘for whose benefit’ the vehicle was intended to be used, the Court finds that there can be no bright line test for what vehicles fall under the 910 paragraph. . . . Two factors may weigh in favor of imputing Mrs. Smith’s use of the vehicle to Debtor: (1) Mrs. Smith uses the vehicle to care for Mr. Smith’s biological grandson, and (2) Mrs. Smith, at times, contributes some of her income to the household expenses. In view of the totality of circumstances, the Court finds these facts insufficient to override Mrs. Smith’s otherwise exclusive use of the vehicle.”); In re Lorenz, 368 B.R. 476, 485–86 (Bankr. E.D. Va. 2007) (Adhering to the “significant and material” test for personal use: “‘the term “personal use” was use of a non-business nature without profit motive.’ . . . [P]ersonal use overlaps with family and household use as all of these uses are non-business related and without profit motive, and therefore all qualify as personal use. . . . This Court adopts the ‘significant and material’ personal use test . . . and holds that it applies no matter what the other use of the vehicle is, family, household or business. . . . [T]he question to answer when determining whether the debtor acquired a vehicle for personal use is, ‘Did the debtor purchase the vehicle with the intent to materially and significantly meet their own personal needs, regardless of any other intentions he may have had?’” Affidavit indicated that the debtor bought a large pickup to accommodate his family, to drive his children to school, day care, church and shopping, and personal use was a significant purpose notwithstanding that the truck was also used for business purposes to haul equipment.); In re Adaway, 367 B.R. 571, 575–76 (Bankr. E.D. Tex. 2007) (“A vehicle acquired for a ‘family use’ may also be acquired for a ‘personal use’ . . . . The phrases are not mutually exclusive . . . . Since the statute does not impose the § 1325(a)(*) limitation only for vehicles which are acquired ‘exclusively’ or ‘solely’ for the personal use of the debtor, the statute contemplates a mixed-use acquisition . . . . [T]his Court is persuaded that the personal use requirement is met and the § 1325(a)(*) limitation is triggered if the personal use of a vehicle is intended at acquisition to be significant and material. . . . The totality of the circumstances will dictate whether a particular use is significant and material. . . . [T]his Mitsubishi vehicle was not acquired for the personal use of the Debtor. The Debtor testified that he acquired the vehicle for the use of his non-debtor spouse, and his testimony is corroborated by his minimal use of the vehicle.”); In re Bolze, No. 06-40036, 2006 WL 4491438, at *3 (Bankr. D. Kan. Aug. 31, 2006) (unpublished) (Karlin) (“Applying the holding from [In re Lowder, No. 05-44802, 2006 WL 1794737 (Bankr. D. Kan. June 28, 2006),] . . . the automobile in question was purchased for the personal use of the Debtors. Debtor Bolze may have purchased the automobile for his wife to primarily drive, but he has stipulated that he personally uses the car for his own transportation when the family all travels together, and that the car was acquired for that purpose. . . . Debtors have not argued that the automobile was purchased for business purposes.”); In re Wilson, No. 06-40637, 2006 WL 3512921, at *3–*4 (Bankr. D. Kan. Dec. 5, 2006) (unpublished) (Karlin) (Deciding question reserved in In re Lowder, No. 05-44802, 2006 WL 1794737 (Bankr. D. Kan. June 28, 2006), 910-day PMSI car is acquired for “personal use” of debtor when personal use is a “significant and material” intended use notwithstanding that there is also some business use. “The Court agrees that [In re Solis, 356 B.R. 398 (Bankr. S.D. Tex. 2006),] has ‘best estimated’ what Congress would have reasonably concluded, . . . and thus adopts [the] ‘significant and material’ test to determine whether a vehicle was acquired for the personal use of a debtor. . . . There is no question the vehicles are used, in part, for functions related solely to the foster children . . . . [T]he vehicles are also used significantly for personal purposes, as well, such as driving to church . . . personal shopping, . . . to ‘relax’ . . . doctor and other appointments. . . . [T]he Ford was purchased . . . to drive to and from . . . workplace, which this Court has previously held constitutes personal use . . . . [C]ontracts . . . expressly indicate each purchase was for personal, and not for business (or farming), purposes. . . . [P]ersonal use of these vehicles was neither inconsequential nor immaterial to Debtors’ daily lives.”).

 

45  See, e.g., In re Counts, No. 07-60542-13, 2007 WL 2669204, at *9–*11 (Bankr. D. Mont. Sept. 6, 2007) (unpublished) (Kirscher) (Applying three different tests, car acquired for and used by debtor in home care and housecleaning business was not acquired for personal use and can be crammed down. “[B]ankruptcy courts have used one of three tests to determine whether a vehicle was acquired for the personal use of a debtor. The first test is the liberal test adopted in [In re Johnson, 350 B.R. 712 (Bankr. W.D. La. 2006)], which considers whether ‘acquisition of the vehicle enabled the debtor to make a significant contribution to the gross income of the family unit.’ . . . [T]he level of personal use is irrelevant where the debtor uses the car to get to and from work, thus permitting the debtor to generate income for maintenance and support. The second test was articulated by the court in [In re Solis, 356 B.R. 398 (Bankr. S.D. Tex. 2006),] and focuses on whether the debtor acquired the vehicle with the intent to materially and significantly meet their own personal needs, as determined by examining the totality of the circumstances. This Court would consider the Solis test to be a more subjective test . . . . The third test is the quantitative approach taken by the court in [In re Joseph, No. 06-50655, 2007 WL 950267 (Bankr. W.D. La. Mar. 20, 2007),] where the court focused on the predominate use of the debtor’s vehicle. . . . Terry’s use of the vehicle in connection with her business of caring for elderly and disabled persons and for cleaning homes would certainly satisfy the standard utilized in Johnson . . . . Terry’s contribution of $1,425.00 to Debtors’ average monthly net income of $3,175.00 is significant. . . . Debtors’ use of the 2001 Dodge would also render the hanging paragraph of § 1325(a) inapplicable under the Joseph test where the inquiry focuses on the predominant use of the vehicle. . . . The more difficult inquiry is under the Solis test, which focuses on whether a debtor’s personal use of a vehicle is substantial and material under the totality of the circumstances. . . . Terry’s uncontested testimony that the 2001 Dodge was acquired because Terry needed a vehicle that was dependable . . . to get to her various jobs . . . is supported by the fact that Debtors claimed a business deduction with respect to the 2001 Dodge on their 2005 and 2006 income tax returns. . . . In sum, this Court concludes that Debtors’ [sic] acquired the 2001 Dodge for business purposes, and thus, the hanging paragraph of § 1325 does not apply.”); In re Grimme, 371 B.R. 814, 816 (Bankr. S.D. Ohio 2007) (Personal use extends to car purchased by debtor who cannot drive. “Debtor has not been able to legally drive for the past 15 years . . . Debtor has never driven the vehicle . . . Debtor’s son uses the vehicle to occasionally drive the Debtor to and from her medical appointments and for other miscellaneous errands. . . . [T]he term ‘personal use’ means, simply, non-business use. . . . When the evidence shows that a vehicle has been acquired for business purposes, the hanging paragraph will not apply. . . . Conversely, if the evidence shows that a vehicle was acquired for non-business purposes, the hanging paragraph will apply. . . . [D]riving to and from work is not a business purpose. . . . The fact that the Debtor does not have a driver’s license is not determinative. Although the Debtor is a passenger, she is still enjoying the personal use of the vehicle.”); In re Andoh, 370 B.R. 377 (Bankr. D. Colo. 2007) (Limousine purchased for “business purpose” was not purchased for personal use.); In re Garrison, No. A06-00396-DMD, 2007 WL 1589554 (Bankr. D. Alaska June 1, 2007) (unpublished) (MacDonald) (Car used for “substantial business activity” was not purchased for personal use.).

 

46  See, e.g., In re Martinez, 363 B.R. 525 (Bankr. S.D. Tex. 2007) (Car was not acquired for personal use because from the time of purchase, it was used by the debtor for transportation to and from employment and for work-related errands which made a significant contribution to family income.); In re Medina, 362 B.R. 799 (Bankr. S.D. Tex. 2007) (Applying “totality of the circumstances/significant contribution test,” car used for transportation to and from employment made a significant contribution to family income and was not acquired for personal use.); In re Hill, 352 B.R. 69 (Bankr. W.D. La. 2006) (Applying “totality of circumstances” test, car was not acquired for personal use when debtor drove car to and from work; utilizing the car to generate income is a business use, not a personal use.); In re Johnson, 350 B.R. 712 (Bankr. W.D. La. 2006) (Car purchased for the primary purpose of enabling one of the debtors to drive to and from work enabled that debtor to make a significant contribution to family income and the car was not acquired for personal use under the totality of these circumstances.), rev’d, No. 06-2175, 2007 WL 2702193 (W.D. La. Sept. 11, 2007) (unpublished) (Doherty). See also In re Garrison, No. A06-00396-DMD, 2007 WL 1589554, at *2 (Bankr. D. Alaska June 1, 2007) (unpublished) (MacDonald) (Car purchased to deliver newspapers and mail was not acquired for personal use and can be stripped down in Chapter 13 case. “[T]he debtor wasn’t just using her pick-up to commute to and from work, she was using the vehicle in the course of her work.”).

 

47  See, e.g., In re Smith, No. 07-30201, 2007 WL 1577668 (Bankr. S.D. Tex. May 29, 2007) (unpublished) (Isgur) (Applying In re Solis, 356 B.R. 398 (Bankr. S.D. Tex. 2006), transportation to and from work may be considered personal, but car purchased for nonfiling spouse was not purchased for personal use of debtor.); In re Phillips, 362 B.R. 284, 303–04 (Bankr. E.D. Va. 2007) (“[T]he requirement of ‘personal use’ found in the ‘hanging paragraph’ of Section 1325 means use of a vehicle for a non-business or non-profit making purpose. . . . [U]se of the Automobile by Phillips for commuting to and from work is not a business use. There is no evidence that Phillips’ employer requires her to have a motor vehicle . . . . [U]se of a vehicle for commuting to work is largely a matter of personal choice and not a business usage except in the most rare circumstances.”); In re Joseph, No. 06-50655, 2007 WL 950267, at *3–*4 (Bankr. W.D. La. Mar. 20, 2007) (unpublished) (Summerhays) (Considering totality of circumstances, when “predominant use” of vehicle is personal, hanging-sentence protection applies notwithstanding that car is driven to and from work. “Transportation to and from work is a personal use in the sense that it satisfies the debtor’s personal needs and obligations . . . . [W]ork transportation has a monetary value . . . . However, these benefits are still personal to the debtor and the debtor’s family. . . . [T]o establish that a vehicle is used for a ‘business’ or ‘profit-making’ purpose, a debtor must show that the vehicle is used to perform the functions of a business or a trade. In other words, does the debtor use the vehicle to carry out his or her job duties once the debtor arrives at work? . . . The contract signed by the debtor typically indicates whether the debtor is acquiring the vehicle for personal or business use. . . . [B]ecause most vehicles are used for a mixture of business and personal use, the court will consider the ‘totality of circumstances’ in determining the predomina[nt] use of the vehicle. . . . The factors relevant to the ‘predomina[nt]’ use of the vehicle include the nature and extent of any personal use of the vehicle, and the relative number of miles that the vehicle is driven for personal versus business uses.”); In re Wilson, No. 06-40637, 2006 WL 3512921, at *3 (Bankr. D. Kan. Dec. 5, 2006) (unpublished) (Karlin) (Applying “significant and material” test, “the Ford was purchased . . . to drive to and from . . . workplace, which this Court has previously held constitutes personal use.”); In re Solis, 356 B.R. 398, 410 (Bankr. S.D. Tex. 2006) (Applying significant and material test, “‘personal use’ includes transportation to and from work.”); In re White, 352 B.R. 633, 641 (Bankr. E.D. La. 2006) (“Debtor acquired her vehicle for both personal use and for transportation to and from work. Given that she did not use the vehicle for business after she arrived at her employment, received no reimbursements from her employer for its use, and deducted no expenses from her income for tax purposes, . . . the Court cannot conclude that the vehicle is a business asset.”); In re Lowder, No. 05-44802, 2006 WL 1794737, at *6 (Bankr. D. Kan. June 28, 2006) (unpublished) (Karlin) (“Merely acquiring a vehicle for her own use, with one of the uses contemplated being to drive to and from work, is not for ‘business’ purposes; it is for personal use. If Debtor’s employer required her to have this automobile to conduct the business of that employer, paid for its costs or expenses to operate, or if she used it within the scope of her employment, this would be a harder question . . . . [W]hen a vehicle is . . . acquired for the joint purpose of traveling to and from work and for conducting a debtor’s private affairs, it is properly classified as ‘personal use’ for purposes of the Bankruptcy Code.”). See also In re Grimme, 371 B.R. 814, 816 (Bankr. S.D. Ohio 2007) (“[D]riving to and from work is not a business purpose.”).

 

48  In re Johnson, 2007 WL 2702193, at *4–*5.

 

49  No. 07-10597-BKC-RBR, 2007 WL 1804931 (Bankr. S.D. Fla. June 19, 2007) (unpublished) (Ray).

 

50  See, e.g., In re Matthews, 378 B.R. 481, 491 (Bankr. D.S.C. 2007) (Waites) (“[T]he Court does not believe the designation of ‘personal, family, or household’ use in the Pacifica Note should be controlling. Debtor and her mother are both parties to the Pacifica Note. The designated use in the Pacifica Note could correctly describe the mother’s use but not Debtor’s use.”); In re Andoh, 370 B.R. 377 (Bankr. D. Colo. 2007) (Parol evidence rule does not prohibit debtor from testifying that use other than personal use was intended at purchase of Lincoln Town Car Limousine notwithstanding that “personal family or household” box was checked on contract; testimony that car was purchased for limousine service proved that car was acquired for business purpose, not personal use.); In re Joseph, No. 06-50655, 2007 WL 950267, at *3–*4 (Bankr. W.D. La. Mar. 20, 2007) (unpublished) (Summerhays) (“The contract signed by the debtor typically indicates whether the debtor is acquiring the vehicle for personal or business use. . . . [B]ecause most vehicles are used for a mixture of business and personal use, the court will consider the ‘totality of circumstances’ in determining the predominate use of the vehicle.”).

 

51  See § 451.1 [ In General: Modification Without § 506 ] § 75.1  In General: Modification Without § 506.

 

52  See §§ 451.1 [ In General: Modification Without § 506 ] § 75.1  In General: Modification Without § 506 and 451.2 [ Motor Vehicles and Any Other Thing of Value ] § 75.2  Motor Vehicles and Any Other Thing of Value.

 

53  Hanging sentence at the end of 11 U.S.C. § 1325(a), discussed in §§ 451.1 [ In General: Modification Without § 506 ] § 75.1  In General: Modification Without § 506 and 451.2 [ Motor Vehicles and Any Other Thing of Value ] § 75.2  Motor Vehicles and Any Other Thing of Value.

 

54  See § 451.2 [ Motor Vehicles and Any Other Thing of Value ] § 75.2  Motor Vehicles and Any Other Thing of Value. See, e.g., In re Hickey, 370 B.R. 219, 221 (Bankr. D. Neb. 2007) (“The plain language indicates that the modifier ‘acquired for the personal use of the debtor’ applies to motor vehicles, and is not one of the applicable elements of the hanging paragraph when the collateral of the debt consists of any other thing of value.” The debtor’s John Deere tractor was not a motor vehicle, but it was a thing of value subject to a purchase money security interest acquired within one year of the petition; debtor could not bifurcate claim secured by tractor.).

 

55  See § 451.2 [ Motor Vehicles and Any Other Thing of Value ] § 75.2  Motor Vehicles and Any Other Thing of Value.