IN RE GEHRKE

SUSAN KELLEY, Bankruptcy Judge

Facts

Lisa Marie Gehrke and Shawn William Gehrke (the "Debtors") filed their chapter 13 petition on December 19, 2006, and this case is governed by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). The Debtors are above-median income debtors as defined by BAPCPA. They filed a plan on December 19, 2006 to which the Trustee objected. The Court sustained that objection after a hearing, finding that the Debtors were deducting too much for taxes and a motorcycle and not proposing any payment to general unsecured creditors. The Debtors have now filed a Second Amended Plan, and the Trustee continues to object, challenging the deduction of ownership expense on Line 29 of Form B22C for a vehicle that is not secured by a lien, the expense deduction for taxes on Line 30 of Form B22C, and the deduction of secured debt on Line 47 of Form B22C for the motorcycle that is allegedly a luxury item. On July 17, 2007, the Court heard arguments from the Trustee and the Debtors' counsel on the Objection and took the matter of plan confirmation under advisement.

Analysis

On August 3, 2007, the Debtors filed an amended statement of current monthly income (Form B22C). "Form B22C is the form used to record the above-median debtors' reasonably necessary expenses in order to determine how much disposable income the debtor is required to dedicate to the chapter 13 plan." In re Stimac, 366 B.R. 889 (Bankr. E.D. Wis. 2007). In their amended Form B22C, the Debtors are no longer claiming ownership expenses for the second vehicle on Line 29. Therefore, the Trustee's objection to this deduction is moot.

Line 30 allows a debtor to deduct "the total average monthly expense that you actually incur for all federal, state and local taxes, other than real estate and sales taxes, such as income taxes, self employment taxes, social security taxes, and Medicare taxes." On their original Form B22C, the Debtors deducted $1,816.14 in taxes. The Trustee claims that they should utilize the actual tax expenditure from 2005, the year prior to filing, or $1,115.00. On their amended Form B22C, the Debtors reduced the tax deduction to $1,554.00.

The Debtors' $1,554.00 deduction is based on an increase in income and withholding since December 2006. This increase in income and taxes rebuts the presumption under Stimac that favors using the 2005 tax year. The Debtors demonstrate "the taxes paid in the most recent year would constitute a materially insufficient or inaccurate deduction, due to a change in circumstances (e.g. increase in earnings, fewer deductions)." In re Stimac, 366 B.R. 889. The rule in Stimac that favors use of the actual taxes paid in the "most recent tax year" must be applied flexibly especially in a case filed in December. In such a case, using the current tax year will provide a better picture of the "total average monthly expense that (they) actually incur." The Debtors will be allowed to use the $1,554.00 deduction on Line 30.

The Trustee's final objection is to the deduction of the Debtors' secured debt on a Harley Davidson motorcycle. The Trustee contends that the motorcycle is a luxury item and that dedicating funds to purchasing such an item while unsecured creditors are paid a minimal dividend is not in good faith. The Debtors dispute that the motorcycle is a luxury good, and point out that it is used nine months of the year in order to save on fuel costs and as a means of transportation to work.

Even if the motorcycle were not used to save gas money and get to work, the Debtors would be entitled to this deduction. Under § 1325(b)(3), for above-median debtors, the expenses to be deducted in calculating disposable income shall be determined under Bankruptcy Code § 707(b)(2)(A) and (B). Section 707(b)(2)(A)(iii) allows the deduction of the average monthly amounts due on secured debts, like the debt on the Debtor's motorcycle. Moreover, the distinction between subsections (I) and (II) of § 707(b)(2)(A)(iii) is noteworthy. While subsection (I) refers generally to "amounts scheduled as contractually due," on all secured debts, subsection (II) is much more specific. That section refers to payments "necessary to maintain possession of the debtor's primary residence, motor vehicle, or other property necessary for the support of the debtor and the debtor's dependents, that serves as collateral for secured debts." 11 U.S.C. § 707(b)(2)(A)(iii)(II). Under the "negative pregnant" rule of statutory construction, "[w]here Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion." Gozlon-Peretz v. United States, 498 U.S. 395, 404 (1991) (internal quotations omitted). Subsection II allows the deduction of certain "additional payments," specifically tailored to include arrearage payments on property necessary for support, i.e., not luxury items. Congress's failure to limit subsection (I) with such specific, explicit qualifiers, such as "estimate of actual payments on the debtor's principal residence, vehicle and other property needed for the debtor's support," is evidence of Congress's failure to intend that result. It follows that scheduled payments on all secured debts are included under subsection (I), regardless of whether the Trustee considers the property a luxury item. In short, the disposable income test for above-median debtors does not require that a debtor can only deduct a secured debt on items such as homes or "reasonable" cars. Rather, a debtor can deduct any secured debt under 11 U.S.C § 707(b)(2)(A)(iii). Although a debtor's use of this deduction for multiple "toys" or luxury items might raise a question about good faith, deduction of $259.49, which the Debtors testified was the actual monthly payment on a motorcycle used to save gas and for transportation to work, does not rise to the level of bad faith.

Conclusion

For the foregoing reasons, the Trustee's Objection to confirmation of the amended chapter 13 plan is overruled. The Debtors explained that the amount of the 2005 taxes paid is different from the taxes they expect to incur in 2007 which is sufficient to rebut the presumption in Stimac. The Debtors are also entitled to deduct the motorcycle as a secured debt under §§ 1325(b)(3) and 707(b)(2)(A)(iii) of the Bankruptcy Code. Once these deductions are allowed, the Debtors' plan proposing a 2% dividend to unsecured creditors is confirmable. The Trustee should submit a confirmation Order for the Debtors' Second Amended Plan.