                                                           FILED
                                                            AUG 23 2016
 1                         NOT FOR PUBLICATION
                                                        SUSAN M. SPRAUL, CLERK
                                                          U.S. BKCY. APP. PANEL
 2                                                        OF THE NINTH CIRCUIT

 3                  UNITED STATES BANKRUPTCY APPELLATE PANEL
 4                            OF THE NINTH CIRCUIT
 5   In re:                        )      BAP No.     CC-15-1441-KuFD
                                   )
 6   DESIREE H. DRURY,             )      Bk. No.     2:15-bk-17125
                                   )
 7                  Debtor.        )
     ______________________________)
 8                                 )
     DESIREE H. DRURY,             )
 9                                 )
                    Appellant,     )
10                                 )
     v.                            )      MEMORANDUM*
11                                 )
     UNITED STATES TRUSTEE,        )
12                                 )
                    Appellee.      )
13   ______________________________)
14                   Argued and Submitted on July 28, 2016
                            at Pasadena, California
15
                            Filed – August 23, 2016
16
              Appeal from the United States Bankruptcy Court
17                for the Central District of California
18       Honorable Thomas B. Donovan, Bankruptcy Judge, Presiding
19
     Appearances:     Stephen R. Wade argued for appellant Desiree H.
20                    Drury; John Postulka argued for appellee United
                      States Trustee.
21
22
     Before: KURTZ, FARIS and DUNN, Bankruptcy Judges.
23
24
25
26        *
           This disposition is not appropriate for publication.
27   Although it may be cited for whatever persuasive value it may
     have (see Fed. R. App. P. 32.1), it has no precedential value.
28   See 9th Cir. BAP Rule 8024-1.
 1                               INTRODUCTION
 2        When a debtor does not own an automobile but makes monthly
 3   lease or loan payments as a prerequisite to his or her continued
 4   possession and use of a vehicle, may the debtor claim an expense
 5   allowance under the means test for car “ownership” expenses?      We
 6   answer this question in the affirmative.    Even though the debtor
 7   Desiree H. Drury is not the owner of the automobile, is not the
 8   borrower under the automobile loan and is not legally obligated
 9   to repay that loan, it is undisputed that Drury will lose
10   possession of the automobile unless she continues to make
11   payments to the lender.    This undisputed fact establishes for
12   means test purposes that the relevant IRS local transportation
13   expense standard of $517 for car ownership expenses is
14   “applicable” to Drury and thus she is entitled to claim this
15   amount for purposes of determining whether her chapter 71 case
16   filing was presumptively abusive under § 707(b)(2).
17        The bankruptcy court incorrectly disallowed Drury’s car
18   ownership expense claim.    As a result, it incorrectly determined
19   that Drury’s chapter 7 case should be dismissed as presumptively
20   abusive under § 707(b)(1) and (2).
21        Additionally, the bankruptcy court rendered insufficient
22   findings to support its determinations that the chapter 7
23   petition was filed in bad faith under § 707(b)(3)(A) and that the
24   chapter 7 case was abusive under the totality of the debtor’s
25
26        1
           Unless specified otherwise, all chapter and section
27   references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and
     all "Rule" references are to the Federal Rules of Bankruptcy
28   Procedure, Rules 1001-9037.

                                       2
 1   financial circumstances pursuant to § 707(b)(3)(B).       Accordingly,
 2   the bankruptcy court’s dismissal order is VACATED and this matter
 3   is REMANDED for further proceedings.
 4                                   FACTS
 5        In May 2015, Drury commenced her bankruptcy case by filing a
 6   voluntary chapter 7 petition.   This was not Drury’s first
 7   bankruptcy case.   In fact, she had filed six prior bankruptcy
 8   cases in the past five years, all of which were dismissed for
 9   failure to comply with various Bankruptcy Code provisions and
10   Rules.   In addition, she also had filed a chapter 7 case in 2001,
11   in which she obtained a discharge order.
12        The U.S. Trustee filed his motion to dismiss her most recent
13   case in October 2015.   The U.S. Trustee asserted that Drury had
14   over $800 in monthly disposable income that she could use to
15   repay her creditors and that, based on this amount, granting
16   Drury relief under chapter 7 would be an abuse of the Bankruptcy
17   Code.
18        According to the U.S. Trustee, the information provided on
19   Drury’s Official Form 22A reflected that Drury had over $100,000
20   in annual income and current monthly income (as defined in
21   § 101(10A)) of $8,580 per month.       However, Drury’s initial
22   Form 22A omitted some of her income.       She only later disclosed
23   that, in addition to her annual salary, she also received child
24   support in the amount of $175 per month.
25        This is only one of several errors and omissions in the
26   financial information Drury provided in her bankruptcy schedules
27   and in her other bankruptcy filings.       She also claimed in her
28   initial Form 22A that she paid $60 per month for telephone

                                        3
 1   services and $40 per month in charitable contributions.   Both of
 2   these claimed expenses turned out to be inaccurate.   Similarly,
 3   Drury claimed $550 per month, in aggregate, for child care
 4   expenses and minor-child education expenses, but the only
 5   evidence she ever offered for these claimed expenses was a letter
 6   from a family friend stating that Drury paid her $75 per week for
 7   picking up two of Drury’s children from school and for helping
 8   them with their homework.
 9        In addition, in her Schedule B, Drury claimed to own a 2008
10   Toyota Camry worth $3,000.   She also represented in her statement
11   of intention regarding secured debts that the Toyota was property
12   of her bankruptcy estate.    She later admitted that she does not
13   own the car and that she never has owned it.   Instead, she
14   informed the U.S. Trustee that her sister bought the car on
15   credit on Drury’s behalf because Drury did not have the credit to
16   obtain an automobile loan in her own name.   Nonetheless, Drury
17   maintained that she drives the car and pays $540 every month to
18   cover the loan payment for the vehicle.
19        The most hotly-disputed issue between the parties concerned
20   the automobile expenses Drury claimed in her form 22A.
21   Notwithstanding her admission that she did not own the 2008
22   Toyota Camry, Drury continued to contend that she was entitled to
23   deduct from her income a vehicle “ownership” expense of $517 and
24   a vehicle operating expense of $400.   The U.S. Trustee contested
25   these expense claims.   According to the U.S. Trustee, Drury only
26   was entitled to claim a $295 vehicle operating expense, and no
27   vehicle ownership expense, because she did not own the Toyota.
28        As the U.S. Trustee put it, the allowed $295 vehicle

                                       4
 1   operating expense was a standard deduction permitted for debtors
 2   operating vehicles in the Los Angeles metropolitan area, and no
 3   vehicle expenses above that amount – ownership or operating
 4   expenses – could be claimed in the absence of ownership.2
 5        The U.S. Trustee assailed Drury for her inflated and
 6   inaccurate expense claims and for her inaccurate and incomplete
 7   information regarding her income.    He also challenged Drury’s
 8   claim that she was entitled to deduct tax-related expenses of
 9   roughly $2,000.   The U.S. Trustee instead insisted that she was
10   entitled to deduct from her income, at most, roughly $1,500 for
11   tax expenses.3
12        Based on these contentions, the U.S. Trustee asserted that
13   Drury’s bankruptcy case should be dismissed as a presumptively
14   abusive bankruptcy filing under § 707(b)(2) and, alternately,
15
16
          2
           The U.S. Trustee posited, without citing any authority,
17   that the age of the Toyota would have entitled Drury to a $200
     older vehicle operating expense if Drury had actually owned the
18
     vehicle. We disagree. In Drummond v. Luedtke (In re Luedtke),
19   508 B.R. 408, 411 (9th Cir. BAP 2014), we held that this older
     vehicle operating expense is not part of the Internal Revenue
20   Service's National Standards or its Local Standards, which
     generally control which expenses above-median-income debtors may
21   claim for purposes of calculating their disposable income under
22   11 U.S.C. § 1325(b)(2). Given our decision in In re Luedtke,
     there is no legal or logical reason why a chapter 7 debtor should
23   be able to claim an older vehicle operating expense for chapter 7
     means test purposes. See In re Willingham, 520 B.R. 818, 823
24   (Bankr. E.D. Cal. 2014).
25        3
           The U.S. Trustee stated in his responsive appeal brief that
26   the bankruptcy court did not render any findings regarding
     Drury’s tax-related expense claim and did not rely on the tax-
27   related expense issue to support its ruling. In light of our
     analysis and resolution of this appeal, there is no need for us
28   to consider further Drury’s tax-related expenses.

                                      5
 1   that her case should be dismissed as abusive under the totality
 2   of Drury’s financial circumstances pursuant to § 707(b)(3)(B).
 3   Oddly, the U.S. Trustee’s dismissal motion contained no argument
 4   under § 707(b)(3)(A) specifically asserting that Drury filed her
 5   bankruptcy in bad faith, even though the U.S. Trustee’s moving
 6   papers asked for relief under both § 707(b)(3)(A) and (B), as
 7   well as under § 707(b)(2).
 8        The bankruptcy court held a hearing on the U.S. Trustee’s
 9   motion to dismiss.   At the hearing, Drury admitted that she is
10   not legally obligated to make the car loan payment every month.
11   She nonetheless insisted that her continued possession and use of
12   the Toyota depends upon her continued monthly payments on the
13   automobile loan.   According to Drury, if she stopped making the
14   monthly loan payments, the lender would repossess the vehicle.
15   The U.S. Trustee never challenged Drury’s factual assertion
16   regarding the consequences of her not making the loan payments.
17   Instead, the U.S. Trustee argued that, as a matter of law,
18   debtors cannot claim a loan or lease payment as a car ownership
19   expense under the IRS’s local transportation expense standard
20   unless they are legally obligated to make that payment.   The
21   U.S. Trustee contended that, without such a legal obligation, the
22   debtor can stop making the car payments at any time, and thus
23   counting the payment for means test purposes would not accurately
24   reflect what Drury can afford to pay her creditors.
25        At the conclusion of the hearing, the bankruptcy court
26   determined that the U.S. Trustee’s position on the vehicle
27   ownership expense was correct.   The court also found that “[t]he
28   Debtor clearly has violated her duty of truthful disclosure

                                      6
 1   notwithstanding her lengthy experiences with the bankruptcy
 2   system and in spite of her right to amend her Schedules.”
 3   Findings of Fact and Conclusions of Law (Dec. 14, 2015) at p. 2.
 4        In addition, the court further found that Drury had a
 5   “substantial ability” to repay her debts, especially in light of
 6   the substantial amount of her income, “though her financial
 7   habits have been to some extent careless.”     Id.
 8        While the bankruptcy court specified that the U.S. Trustee
 9   had established grounds for dismissal under § 707(b)(1), (b)(2),
10   (b)(3)(A) and (b)(3)(B), the bankruptcy court made no explicit
11   findings regarding Drury’s bad faith.     Nor did the bankruptcy
12   court comment on Drury’s bad faith at the dismissal motion
13   hearing.
14        On December 14, 2015, the bankruptcy court entered its order
15   dismissing Drury’s bankruptcy case, and Drury timely appealed.
16                              JURISDICTION
17        The bankruptcy court had jurisdiction pursuant to 28 U.S.C.
18   §§ 1334 and 157(b)(2)(A) and (O).    We have jurisdiction under
19   28 U.S.C. § 158.
20                                  ISSUE
21        Did the bankruptcy court abuse its discretion when it
22   dismissed Drury’s bankruptcy case under § 707(b)(1), (b)(2),
23   (b)(3)(A) and (b)(3)(B)?
24                           STANDARDS OF REVIEW
25        We review dismissals under § 707(b) for an abuse of
26   discretion.   Ng v. Farmer (In re Ng), 477 B.R. 118, 125 (9th Cir.
27   BAP 2012); Ceniceros v. Yaqub (In re Ceniceros), 2012 WL 2017969,
28   at *5 (Mem. Dec.) (9th Cir. BAP June 5, 2012).

                                      7
 1        The bankruptcy court abuses its discretion if it applies an
 2   incorrect legal rule or its factual findings are illogical,
 3   implausible or without support in the record.    See United States
 4   v. Hinkson, 585 F.3d 1247, 1262 (9th Cir. 2009) (en banc).
 5                               DISCUSSION
 6   1. The Means Test and Its Expense Allowance Standards – Generally
 7        As amended in 2005, the Bankruptcy Code authorizes
 8   bankruptcy courts to dismiss as abusive certain chapter 7 cases
 9   and presumes that abuse is present when the debtor fails what
10   commonly is known as the “means test.”    See § 707(b)(1) &
11   (b)(2)(A); see also Egebjerg v. Anderson (In re Egebjerg),
12   574 F.3d 1045, 1048 (9th Cir. 2009).     The means test measures the
13   debtor’s “current monthly income”4 and determines whether that
14   income (less certain allowed expenses and then multiplied by 60)
15   exceeds threshold amounts designated in the statute.
16   § 707(b)(2)(A).   At the time of Drury’s bankruptcy filing, the
17   relevant designated statutory threshold amount was $12,475.    Id.
18        There is no genuine dispute regarding the amount of Drury’s
19   current monthly income.   Instead, this appeal hinges on the
20   transportation expense amounts Drury attempted to deduct from her
21   current monthly income and whether the bankruptcy court correctly
22   disallowed most of Drury’s claimed transportation expenses.    But
23   before we look at any of the transportation expense claims, a bit
24   of background on the means test and its expense standards will
25
          4
26         Generally speaking, the term “current monthly income” means
     the debtor’s average monthly income, regardless of source, and
27   includes amounts paid by others on a regular basis for the
     debtor’s household expenses. For the full definition of “current
28   monthly income” please see § 101(10A).

                                      8
 1   provide some helpful context.
 2         Before the passage of the Bankruptcy Abuse Prevention and
 3   Consumer protection Act of 2005, Pub. L. 109–8, 119 Stat. 23
 4   (2005) (“BAPCPA”), the Bankruptcy Code instructed the bankruptcy
 5   courts to employ a presumption that chapter 7 debtors were
 6   entitled to chapter 7 relief.   In re Egebjerg, 574 F.3d at 1048.
 7   But the 2005 BAPCPA amendments replaced this presumption with an
 8   emphasis on maximizing the recovery for the debtor’s creditors.
 9   Id.   As In re Egebjerg explained, BAPCPA accomplished this sea
10   change in chapter 7 practice by introducing the means test to
11   determine if the debtor could repay at least some amount to his
12   or her creditors.   Id.
13         The expense side of the means test equation,
14   § 707(b)(2)(A)(ii)(I), was novel.    Prior to BAPCPA, there was no
15   need for chapter 7 debtors to prove routinely that they had no
16   ability to repay their creditors over time, so there was no
17   routine need to measure the debtor’s allowable expenses for
18   purposes of calculating the debtor’s disposable income (if any).
19   See In re Egebjerg, 574 F.3d at 1048.   For purposes of
20   determining the debtor’s allowable expenses, the means test
21   provides in part:
22         The debtor's monthly expenses shall be the debtor's
           applicable monthly expense amounts specified under the
23         National Standards and Local Standards, and the
           debtor's actual monthly expenses for the categories
24         specified as Other Necessary Expenses issued by the
           Internal Revenue Service for the area in which the
25         debtor resides, as in effect on the date of the order
           for relief . . . .
26
27
28

                                      9
 1   § 707(b)(2)(A)(ii)(I).5
 2         While there is no pre-BAPCPA history of routinely measuring
 3   chapter 7 debtors’ allowable expenses, the measuring of
 4   chapter 13 debtors’ expenses, for the purpose of determining
 5   whether they were paying all of their disposable income to their
 6   creditors during the term of their chapter 13 plan, predates
 7   BAPCPA.   See Ransom v. FIA Card Servs., N.A., 562 U.S. 61, 65 &
 8   78 (2011); In re Luedtke, 508 B.R. at 413.    Before BAPCPA,
 9   bankruptcy courts had broad discretion to determine which
10   expenses were reasonable and necessary for individual chapter 13
11   debtors to claim on a case-by-case basis.    Ransom, 562 U.S. at
12   65.
13         Apparently unhappy with the “varying and often inconsistent
14   determinations” that resulted from the pre-BACPA case-by-case
15   approach, id. at 65, Congress specified in its BAPCPA amendments
16   that the means test’s standardized and mathematical approach for
17   determining allowable expenses would be utilized to calculate the
18   disposable income of both chapter 7 debtors and chapter 13
19   debtors whose income exceeded certain benchmarks.    Id. at 65, 78;
20   see also In re Luedtke, 508 B.R. at 413 (“BAPCPA replaced [the
21   bankruptcy courts’] discretion with the ‘means test’ — a
22   formulaic and mechanical method of assessing debtors’ ability to
23   pay.”).
24         Indeed, Congress referred to its adoption of its means test
25
           5
26         In addition to the amounts provided for in the National
     Standards, the Local Standards and in the Other Necessary
27   Expenses categories issued by the Internal Revenue Service,
     debtors can claim payments on account of secured and priority
28   debt to the extent permitted by § 707(b)(2)(A)(iii) and (iv).

                                     10
 1   as “[t]he heart of [BAPCPA's] consumer bankruptcy reforms,”
 2   because it would “help ensure that debtors who can pay creditors
 3   do pay them” and thereby would help prevent those abuses of the
 4   bankruptcy system that BAPCPA was intended to prevent.    Ransom,
 5   562 U.S. at 64 (emphasis in original) (citing H.R. Rep.
 6   No. 109–31, pt. 1, p. 2 (2005)).
 7   2. Proper Application of the Means Test Expense Allowance
 8   Standards to Transportation Expenses
 9        Having considered the background behind the means test and
10   its expense allowance standards, we next consider the correct
11   application of those standards to transportation expenses.    The
12   National Standards and Local Standards referenced in
13   § 707(b)(2)(A)(ii)(I) (quoted above) are “tables that the IRS
14   prepares listing standardized expense amounts” that are used to
15   determine a taxpayer’s ability to pay past-due tax liability.
16   Ransom, 562 U.S. at 61.   But the National Standards and Local
17   Standards are not self-explanatory.    Bankruptcy courts sometimes
18   must consult the IRS’s Financial Analysis Handbook (IRM 5.15.1)
19   in order to correctly interpret and apply the National Standards
20   and Local Standards.   In re Luedtke, 508 B.R. at 411, 415; see
21   also Ransom, 562 U.S. at 72-73 & n.7 (stating that the IRS's
22   Financial Analysis Handbook is persuasive – but not controlling –
23   authority for determining how bankruptcy courts should apply the
24   IRS’s National Standards and Local Standards).   So long as the
25   relevant portion of Financial Analysis Handbook is not
26   inconsistent with the Bankruptcy Code, bankruptcy courts may
27   refer to the Handbook as an aid in applying the National
28   Standards and Local Standards.   Id. at 72.

                                      11
 1        The relevant version of the Local Standards tables for
 2   transportation expenses merely state that a taxpayer may claim an
 3   expense of $517 in vehicle ownership costs and an expense of $295
 4   in vehicle operating costs.   See IRS Local Transportation Expense
 5   Standards - West Census Region – for Cases Filed Between April 1,
 6   2015 and May 14, 2015, Inclusive, as reported in, U.S. Trustee’s
 7   website, https://www.justice.gov/ust/means-testing/means-testing-
 8   cases-filed-between-april-1-2015-and-may-14-2015-inclusive (last
 9   visited Aug. 16, 2016).   The commentary accompanying these tables
10   states in part as follows:
11        b. Transportation Expense Standards for taxpayers with
          a vehicle consist of two parts: nationwide figures for
12        monthly loan or lease payments referred to as ownership
          costs, and additional amounts for monthly operating
13        costs broken down by Census Region and Metropolitan
          Statistical Area (MSA). A conversion chart has been
14        provided with the standards that lists the states that
          comprise each Census Region, as well as the counties
15        and cities included in each MSA. The ownership cost
          portion of the transportation standard, although it
16        applies nationwide, is still considered part of the
          Local Standards. The ownership costs provide maximum
17        allowances for the lease or purchase of up to two
          automobiles if allowed as a necessary expense. A
18        single taxpayer is normally allowed one automobile.
19        The operating costs include maintenance, repairs,
          insurance, fuel, registrations, licenses, inspections,
20        parking and tolls.
21        If a taxpayer has a car payment, the allowable
          ownership cost added to the allowable operating cost
22        equals the allowable transportation expense. If a
          taxpayer has a car, but no car payment, only the
23        operating costs portion of the transportation standard
          is used to figure the allowable transportation expense.
24        In both of these cases, the taxpayer is allowed the
          amount actually spent, or the standard, whichever is
25        less.
26   Census Bureau, IRS Data and Administrative Expenses Multipliers
27   for Cases Filed Between April 1, 2015 and May 14, 2015, Inclusive
28   as reported in, U.S. Trustee’s website, https://www.justice.gov/

                                     12
 1   ust/means-testing/means-testing-cases-filed-between-april-1-2015-
 2   and-may-14-2015-inclusive (last visited Aug. 16, 2016) (emphasis
 3   added).
 4        After reviewing substantially similar IRS materials, Ransom
 5   held: (1) that the IRS’s vehicle ownership expenses provided for
 6   in its Local Standards only consist of lease payments or loan
 7   payments; and (2) that a debtor who does not make payment on a
 8   car lease or a car loan cannot claim vehicle ownership expenses.
 9   Ransom, 562 U.S. at 71-72.   In so holding, Ransom explained that
10   vehicle ownership expense amounts are not “applicable” within the
11   meaning of § 707(b)(2)(A)(ii)(I) (and hence not allowable as
12   claimed) unless the debtor incurred some vehicle ownership
13   expenses of the type enumerated in the IRS’s Local Standards for
14   transportation expenses.   Id. at 69-72.
15   3. Proper Treatment of Drury’s Claimed Transportation Expenses
16        Here, Drury conceded that she does not own the Toyota she
17   originally listed on her Schedule B and that she is not indebted
18   under any car lease or car loan.     According to the U.S. Trustee,
19   Drury cannot claim the loan payments she makes because she is not
20   legally obligated to make those payments.    Without any legal
21   obligation, the U.S. Trustee reasons, Drury could stop making the
22   car payments at any time she wants, so the amount of her car
23   payments could be made available to pay back her creditors.
24        We disagree.   Nothing in the Bankruptcy Code or in the IRS
25   Collection Financial Standards suggests that debtors only may
26   claim as local transportation expenses car loan or lease payments
27   they make for which they are personally liable.    In fact, the
28   language of the statute points in the opposite direction:

                                     13
 1   "Notwithstanding any other provision of this clause, the monthly
 2   expenses of the debtor shall not include any payments for debts."
 3   Although the meaning of the "notwithstanding" provision is murky,
 4   it cuts against the argument that a car "ownership" expense only
 5   counts if the debtor is legally obligated to pay it, because in
 6   that case the debtor's car payments are "payments for debt[]."
 7   Further, when one considers the means test as a whole and its
 8   underlying purpose – to assure that debtors pay what they can to
 9   their creditors – it makes no sense to focus on the absence or
10   presence of a legally enforceable debt.   Most necessities of life
11   – including most of those accounted for in the IRS Collection
12   Financial Standards – are not debts.6   And yet it still is
13   essential for debtors to pay these amounts in order to maintain a
14   certain minimal standard of living – as the IRS Collection
15   Financial Standards explicitly recognize.   See Wedoff, supra at
16   253 & n.57; see also Ransom, 562 U.S. at 70 (“Congress intended
17   the means test to approximate the debtor’s reasonable
18   expenditures on essential items.”).
19        Even without a legally binding obligation to make the
20   payments for the car loan in her sister’s name, if Drury is going
21   to continue to use the car, she needs to continue to make the
22   payments.   Otherwise, the lender will repossess the vehicle, and
23   Drury will be forced to get around Los Angeles without an
24   automobile – an automobile that the IRS’s Collection Financial
25
26        6
           For a complete description of the types of expenses the
27   IRS Collection Financial Standards cover, please see Eugene R.
     Wedoff, Means Testing in the New § 707(b), 79 Am. Bankr. L.J.
28   231, 253–65 (2005).

                                     14
 1   Standards (and the means test) permit her to use (and pay for)
 2   even if this means that she will have less funds to pay her
 3   creditors.
 4        Nor does Drury’s lack of title to the automobile persuade us
 5   otherwise.    We do not read the Local Standards’ reference to car
 6   “ownership” expenses as making ownership of the automobile
 7   essential to claiming this transportation expense.    In order to
 8   claim this transportation expense, the key determinant is whether
 9   the debtor makes a car lease payment or a car loan payment.
10   Ownership of the car is no more essential to the necessity of
11   this expense than a legally enforceable debt.    Automobile lessees
12   do not "own" the cars they drive.     The Local Standards’ reference
13   to car “ownership” expenses can and should be considered a
14   misnomer.    Indeed, the Executive Office for U.S. Trustees has
15   made this exact point in a published law journal article.    See
16   Mark A. Redmiles, The Supreme Court Interprets the Means Test,
17   Am. Bankr. Inst. J., April 2011, at 18, 93 n.21.
18        Moreover, nothing in Ransom requires a different result.
19   Ransom answered a different question: whether a debtor who does
20   not make any car lease or car loan payments can claim under the
21   means test a car ownership expense.    Ransom in essence held that
22   car ownership was not sufficient to entitle a debtor to claim
23   this expense.    Ransom did not address whether car ownership was
24   necessary to entitle a debtor to claim this expense.    For the
25   reasons set forth above, we hold that debtors who make monthly
26   car loan payments or car lease payments as a prerequisite to
27   their continued use of the vehicle may claim this expense under
28   the means test even if they do not own the vehicle.

                                      15
 1   4. Correct Calculation of Drury’s Disposable Income
 2         Aside from Drury’s disallowed vehicle ownership expense of
 3   $517, Drury continues to claim an inflated $400 for vehicle
 4   operating expenses, which should not have exceeded $295 under the
 5   relevant version of the IRS’s Local Standards for transportation
 6   expenses.   Likewise, Drury continues to claim an inflated $550,
 7   in aggregate, for childcare and minor-child education expenses.
 8   Drury only substantiated $300 per month for child-related
 9   expenses, which she pays to a family friend for picking up two of
10   her kids from school and helping them with homework.   When the
11   excess amounts from these expense categories is summed together
12   ($105 + $250), the total reflects that Drury continues to
13   overstate her allowable monthly expenses by $355 and thereby
14   continues to understate her monthly disposable income by that
15   same amount.
16         Drury has calculated her monthly disposable income as a
17   negative amount – a negative $364.79.   When the above-referenced
18   $355 is added back into her understated monthly disposable income
19   figure, the correct amount of Drury’s monthly disposable income
20   is roughly a negative $15.   Because this amount, when multiplied
21   by 60, does not exceed § 707(b)(2)(A)(i)(II)’s threshold amount
22   of $12,475, the presumption of abuse under § 707(b)(2)(A)(i) is
23   not triggered.   Therefore, the bankruptcy court abused its
24   discretion when it dismissed Drury’s bankruptcy case as
25   presumptively abusive.
26   5. Dismissal of Drury’s Bankruptcy Case under § 707(b)(3)(A) and
27   (B)
28         Because we have concluded that the bankruptcy court’s

                                     16
 1   dismissal of the bankruptcy case under § 707(b)(1) and (b)(2) was
 2   an abuse of the bankruptcy court’s discretion, we also need to
 3   address the bankruptcy court’s alternate grounds for dismissal
 4   under § 707(b)(3)(A) and (B).   See In re Egebjerg, 574 F.3d at
 5   1048 (“the statute is framed to consider the presumptive abuse
 6   question first, and resorts to the totality of circumstances
 7   analysis [and the bad faith analysis] only if the debtor survives
 8   the means test.”).
 9        Under § 707(b)(3)(A), a chapter 7 case may be dismissed as
10   abusive if the debtor filed his or her chapter 7 petition in bad
11   faith.   The Bankruptcy Code does not define bad faith.   In the
12   chapter 13 context, the Ninth Circuit has held that bankruptcy
13   courts in determining bad faith should consider all relevant
14   factors and, to aid bankruptcy courts in the bad faith
15   assessment, set forth the following non-exhaustive list of
16   factors to consider: (1) whether the debtor has stated inaccurate
17   facts in his or her bankruptcy filings, attempted to improperly
18   manipulate the Bankruptcy Code, or otherwise pursued bankruptcy
19   relief in an inequitable manner; (2) the debtor's prior
20   bankruptcy case filings and dismissals; (3) the motivation for
21   the debtor’s bankruptcy case filing, including any intent to
22   impede state court litigation; and (4) any egregious conduct.
23   Leavitt v. Soto (In re Leavitt), 171 F.3d 1219, 1224 (9th Cir.
24   1999).
25        These same factors are equally pertinent to the bad faith
26   inquiry in the chapter 7 context.    In re Mitchell, 357 B.R. 142,
27   154 (Bankr. C.D. Cal. 2006); see also Franco v. United States
28   Trustee (In re Franco), 2016 WL 3227154, at *5 (Mem. Dec.) (9th

                                     17
 1   Cir. BAP June 2, 2016) (“Although Leavitt involved a chapter 13
 2   case, we see no reason why the standards for a finding of bad
 3   faith in a chapter 7 case should be any different.”).
 4        Here, the only findings of the bankruptcy court arguably
 5   applicable to its bad faith determination were as follows:
 6        The Debtor clearly has violated her duty of truthful
          disclosure notwithstanding her lengthy experiences with
 7        the bankruptcy system and in spite of her right to
          amend her Schedules.
 8
          Debtor nevertheless has a substantial ability to pay
 9        her creditors, especially as her income is substantial,
          though her financial habits have been to some extent
10        careless.
11   Findings of Fact and Conclusions of Law (Dec. 14, 2015) at
12   2:25-28.   The bankruptcy court did not specifically find that
13   Drury acted in bad faith, nor is there any indication that the
14   bankruptcy court considered all of the Leavitt factors or all
15   relevant factors.   While there are other facts in the record that
16   might support a finding of bad faith, we cannot say on this
17   record, and in light of the limited findings the bankruptcy court
18   made, that we have a clear and complete understanding of the
19   basis for the bankruptcy court’s bad faith ruling.
20   In re Leavitt, 171 F.3d at 1223.      More importantly, on this
21   record, we cannot ascertain whether the bankruptcy court applied
22   the correct legal standard.   Consequently, vacating the
23   bankruptcy court’s bad faith determination and remanding for
24   further findings is necessary.
25         Under § 707(b)(3)(B), a chapter 7 case may be dismissed as
26   abusive under the totality of the debtor’s financial
27   circumstances.   In assessing the totality of the debtor’s
28   financial circumstances, we consider the same non-exhaustive list

                                      18
 1   of factors used by the Ninth Circuit for the determination of
 2   substantial abuse under pre-BAPCPA law.    In re Ng, 477 B.R. at
 3   126 (citing Price v. United States Trustee (In re Price),
 4   353 F.3d 1135, 1139–40 (9th Cir. 2004)).    These factors include:
 5         (1) Whether the debtor has a likelihood of sufficient
           future income to fund a Chapter 11, 12, or 13 plan
 6         which would pay a substantial portion of the unsecured
           claims; [2] Whether the debtor's petition was filed as
 7         a consequence of illness, disability, unemployment, or
           some other calamity; (3) Whether the schedules suggest
 8         the debtor obtained cash advancements and consumer
           goods on credit exceeding his or her ability to repay
 9         them; (4) Whether the debtor's proposed family budget
           is excessive or extravagant; (5) Whether the debtor's
10         statement of income and expenses is misrepresentative
           of the debtor's financial condition; and (6) Whether
11         the debtor has engaged in eve-of-bankruptcy purchases.
12   Id.   “[A] ‘debtor’s ability to pay his debts will, standing
13   alone, justify a section 707(b) dismissal.’”    Id. (quoting
14   In re Price, 353 F.3d at 1140).
15         Here, the bankruptcy court found that Drury had “a
16   substantial ability to pay her creditors.”    But the bankruptcy
17   court did not explain how it reached this conclusion for purposes
18   of § 707(b)(3)(B).   It very well might have been based on the
19   bankruptcy court’s erroneous disallowance of Drury’s car loan
20   payments as an actual and necessary transportation expense.    For
21   the same reasons we rejected this disallowance in the context of
22   determining whether there was presumption of abuse under
23   § 707(b)(2), we also reject this disallowance for § 707(b)(3)(B)
24   purposes.7   Because the bankruptcy court’s findings were
25
           7
26         To be clear, the legal standards governing expense
     allowance under the means test (§ 707(b)(2)) and under the
27   totality of the debtor’s financial circumstances (§ 707(b)(3)(B))
     are different. Compare Ransom, 562 U.S. at 65-66, with In re Ng,
28                                                      (continued...)

                                       19
 1   insufficient on the record presented to afford us with a clear
 2   and complete understanding of the basis for the bankruptcy
 3   court’s totality of the circumstances ruling, we must vacate the
 4   bankruptcy court’s § 707(b)(3)(B) determination and remand for
 5   further findings regarding the totality of the debtor’s financial
 6   circumstances.
 7                              CONCLUSION
 8        For the reasons set forth above, we VACATE the bankruptcy
 9   court’s dismissal order, and we REMAND this matter for further
10   proceedings consistent with this decision.
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26        7
           (...continued)
27   477 B.R. at 126. Nonetheless, the bankruptcy court here did not
     sufficiently justify the disallowance of Drury’s car ownership
28   expense under either standard.

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