Ransom v. FIA Card Services, N. A.

(Slip Opinion) OCTOBER TERM, 2010 1

Syllabus

NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
being done in connection with this case, at the time the opinion is issued.
The syllabus constitutes no part of the opinion of the Court but has been
prepared by the Reporter of Decisions for the convenience of the reader.
See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.

SUPREME COURT OF THE UNITED STATES

Syllabus

RANSOM v. FIA CARD SERVICES, N. A., FKA MBNA

AMERICA BANK, N. A.

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
THE NINTH CIRCUIT

No. 09–907. Argued October 4, 2010—Decided January 11, 2011
Chapter 13 of the Bankruptcy Code uses a statutory formula known as
the “means test” to help ensure that debtors who can pay creditors do
pay them. The means test instructs a debtor to determine his “dis
posable income”—the amount he has available to reimburse credi
tors—by deducting from his current monthly income “amounts rea
sonably necessary to be expended” for, inter alia, “maintenance or
support.” 11 U. S. C. §1325(b)(2)(A)(i). For a debtor whose income is
above the median for his State, the means test indentifies which ex
penses qualify as “amounts reasonably necessary to be expended.” As
relevant here, the statute provides that “[t]he debtor’s monthly ex
penses shall be the debtor’s applicable monthly expense amounts
specified under the National Standards and Local Standards, and the
debtor’s actual monthly expenses for the categories specified as Other
Necessary Expenses issued by the Internal Revenue Service [IRS] for
the area in which the debtor resides.” §707(b)(2)(A)(ii)(I).
The Standards are tables listing standardized expense amounts for
basic necessities, which the IRS prepares to help calculate taxpayers’
ability to pay overdue taxes. The IRS also creates supplemental
guidelines known as the “Collection Financial Standards,” which de
scribe how to use the tables and what the amounts listed in them
mean. The Local Standards include an allowance for transportation
expenses, divided into vehicle “Ownership Costs” and vehicle “Oper
ating Costs.” The Collection Financial Standards explain that “Own
ership Costs” cover monthly loan or lease payments on an automo
bile; the expense amounts listed are based on nationwide car
financing data. The Collection Financial Standards further state
that a taxpayer who has no car payment may not claim an allowance
2 RANSOM v. FIA CARD SERVICES, N. A.

Syllabus

for ownership costs.
When petitioner Ransom filed for Chapter 13 bankruptcy relief, he
listed respondent (FIA) as an unsecured creditor. Among his assets,
Ransom reported a car that he owns free of any debt. In determining
his monthly expenses, he nonetheless claimed a car-ownership deduc
tion of $471, the full amount specified in the “Ownership Costs” table,
as well as a separate $388 deduction for car-operating costs. Based
on his means-test calculations, Ransom proposed a bankruptcy plan
that would result in repayment of approximately 25% of his unse
cured debt. FIA objected on the ground that the plan did not direct
all of Ransom’s disposable income to unsecured creditors. FIA con
tended that Ransom should not have claimed the car-ownership al
lowance because he does not make loan or lease payments on his car.
Agreeing, the Bankruptcy Court denied confirmation of the plan.
The Ninth Circuit Bankruptcy Appellate Panel and the Ninth Circuit
affirmed.
Held: A debtor who does not make loan or lease payments may not take
the car-ownership deduction. Pp. 6–18.
(a) This Court’s interpretation begins with the language of the
Bankruptcy Code, which provides that a debtor may claim only “ap
plicable” expense amounts listed in the Standards. Because the Code
does not define the key word “applicable,” the term carries its ordi
nary meaning of appropriate, relevant, suitable, or fit. What makes
an expense amount “applicable” in this sense is most naturally un
derstood to be its correspondence to an individual debtor’s financial
circumstances. Congress established a filter, permitting a debtor to
claim a deduction from a National or Local Standard table only if
that deduction is appropriate for him. And a deduction is so appro
priate only if the debtor will incur the kind of expense covered by the
table during the life of the plan. Had Congress not wanted to sepa
rate debtors who qualify for an allowance from those who do not, it
could have omitted the term “applicable” altogether. Without that
word, all debtors would be eligible to claim a deduction for each cate
gory listed in the Standards. Interpreting the statute to require a
threshold eligibility determination thus ensures that “applicable”
carries meaning, as each word in a statute should.
This reading draws support from the statute’s context and purpose.
The Code initially defines a debtor’s disposable income as his “cur
rent monthly income . . . less amounts reasonably necessary to be ex
pended.” §1325(b)(2). It then instructs that such reasonably neces
sary amounts “shall be determined in accordance with” the means
test. §1325(b)(3). Because Congress intended the means test to ap
proximate the debtor’s reasonable expenditures on essential items, a
debtor should be required to qualify for a deduction by actually incur
 Cite as: 562 U. S. ____ (2011) 3

Syllabus

ring an expense in the relevant category. Further, the statute’s pur
pose—to ensure that debtors pay creditors the maximum they can af
ford—is best achieved by interpreting the means test, consistent with
the statutory text, to reflect a debtor’s ability to afford repayment.
Pp. 6–9.
(b) The vehicle-ownership category covers only the costs of a car
loan or lease. The expense amount listed ($471) is the average
monthly payment for loans and leases nationwide; it is not intended
to estimate other conceivable expenses associated with maintaining a
car. Maintenance expenses are the province of the separate “Operat
ing Costs” deduction. A person who owns a car free and clear is enti
tled to the “Operating Costs” deduction for all driving-related ex
penses. But such a person may not claim the “Ownership Costs”
deduction, because that allowance is for the separate costs of a car
loan or lease. The IRS’ Collection Financial Standards reinforce this
conclusion by making clear that individuals who have a car but make
no loan or lease payments may take only the operating-costs deduc
tion. Because Ransom owns his vehicle outright, he incurs no ex
pense in the “Ownership Costs” category, and that expense amount is
therefore not “applicable” to him. Pp. 9–11.
(c) Ransom’s arguments to the contrary—an alternative interpreta
tion of the key word “applicable,” an objection to the Court’s view of
the scope of the “Ownership Costs” category, and a criticism of the
policy implications of the Court’s approach—are unpersuasive.
Pp. 11–18.
577 F. 3d 1026, affirmed.

KAGAN, J., delivered the opinion of the Court, in which ROBERTS,
C. J., and KENNEDY, THOMAS, GINSBURG, BREYER, ALITO, and SO-
TOMAYOR, JJ., joined. SCALIA, J., filed a dissenting opinion.
 Cite as: 562 U. S. ____ (2011) 1

Opinion of the Court

NOTICE: This opinion is subject to formal revision before publication in the
preliminary print of the United States Reports. Readers are requested to
notify the Reporter of Decisions, Supreme Court of the United States, Wash
ington, D. C. 20543, of any typographical or other formal errors, in order
that corrections may be made before the preliminary print goes to press.

SUPREME COURT OF THE UNITED STATES
_________________

No. 09–907
_________________

JASON M. RANSOM, PETITIONER v. FIA CARD

SERVICES, N. A., FKA MBNA AMERICA

BANK, N. A.

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF

APPEALS FOR THE NINTH CIRCUIT

[January 11, 2011]

JUSTICE KAGAN delivered the opinion of the Court.
Chapter 13 of the Bankruptcy Code enables an individ
ual to obtain a discharge of his debts if he pays his credi
tors a portion of his monthly income in accordance with a
court-approved plan. 11 U. S. C. §1301 et seq. To deter
mine how much income the debtor is capable of paying,
Chapter 13 uses a statutory formula known as the “means
test.” §§707(b)(2) (2006 ed. and Supp. III), 1325(b)(3)(A)
(2006 ed.). The means test instructs a debtor to deduct
specified expenses from his current monthly income. The
result is his “disposable income”—the amount he has
available to reimburse creditors. §1325(b)(2).
This case concerns the specified expense for vehicle
ownership costs. We must determine whether a debtor
like petitioner Jason Ransom who owns his car outright,
and so does not make loan or lease payments, may claim
an allowance for car-ownership costs (thereby reducing the
amount he will repay creditors). We hold that the text,
context, and purpose of the statutory provision at issue
preclude this result. A debtor who does not make loan or
2 RANSOM v. FIA CARD SERVICES, N. A.

Opinion of the Court

lease payments may not take the car-ownership deduction.
I

A

“Congress enacted the Bankruptcy Abuse Prevention
and Consumer Protection Act of 2005 (BAPCPA or Act) to
correct perceived abuses of the bankruptcy system.” Mi
lavetz, Gallop & Milavetz, P. A. v. United States, 559 U. S.
___, ___ (2010) (slip op., at 1). In particular, Congress
adopted the means test—“[t]he heart of [BAPCPA’s] con
sumer bankruptcy reforms,” H. R. Rep. No. 109–31, pt. 1,
p. 2 (2005) (hereinafter H. R. Rep.), and the home of the
statutory language at issue here—to help ensure that
debtors who can pay creditors do pay them. See, e.g., ibid.
(under BAPCPA, “debtors [will] repay creditors the maxi
mum they can afford”).
In Chapter 13 proceedings, the means test provides a
formula to calculate a debtor’s disposable income, which
the debtor must devote to reimbursing creditors under a
court-approved plan generally lasting from three to five
years. §§1325(b)(1)(B) and (b)(4).1 The statute defines
“disposable income” as “current monthly income” less
“amounts reasonably necessary to be expended” for “main
tenance or support,” business expenditures, and certain
charitable contributions. §§1325(b)(2)(A)(i) and (ii). For a
debtor whose income is above the median for his State, the
means test identifies which expenses qualify as “amounts
——————
1 Chapter 13 borrows the means test from Chapter 7, where it is used

as a screening mechanism to determine whether a Chapter 7 proceed
ing is appropriate. Individuals who file for bankruptcy relief under
Chapter 7 liquidate their nonexempt assets, rather than dedicate their
future income, to repay creditors. See 11 U. S. C. §§704(a)(1), 726. If
the debtor’s Chapter 7 petition discloses that his disposable income as
calculated by the means test exceeds a certain threshold, the petition is
presumptively abusive. §707(b)(2)(A)(i). If the debtor cannot rebut the
presumption, the court may dismiss the case or, with the debtor’s
consent, convert it into a Chapter 13 proceeding. §707(b)(1).
 Cite as: 562 U. S. ____ (2011) 3

Opinion of the Court

reasonably necessary to be expended.” The test supplants
the pre-BAPCPA practice of calculating debtors’ reason
able expenses on a case-by-case basis, which led to varying
and often inconsistent determinations. See, e.g., In re
Slusher, 359 B. R. 290, 294 (Bkrtcy. Ct. Nev. 2007).
Under the means test, a debtor calculating his “rea
sonably necessary” expenses is directed to claim allow
ances for defined living expenses, as well as for secured
and priority debt. §§707(b)(2)(A)(ii)–(iv). As relevant
here, the statute provides:
“The debtor’s monthly expenses shall be the debtor’s
applicable monthly expense amounts specified under
the National Standards and Local Standards, and the
debtor’s actual monthly expenses for the categories
specified as Other Necessary Expenses issued by the
Internal Revenue Service [IRS] for the area in which
the debtor resides.” §707(b)(2)(A)(ii)(I).
These are the principal amounts that the debtor can claim
as his reasonable living expenses and thereby shield from
creditors.
The National and Local Standards referenced in this
provision are tables that the IRS prepares listing stan
dardized expense amounts for basic necessities.2 The IRS
uses the Standards to help calculate taxpayers’ ability to
pay overdue taxes. See 26 U. S. C. §7122(d)(2). The IRS
also prepares supplemental guidelines known as the Col
lection Financial Standards, which describe how to use the
——————
2 The National Standards designate allowances for six categories of

expenses: (1) food; (2) housekeeping supplies; (3) apparel and services;
(4) personal care products and services; (5) out-of-pocket health care
costs; and (6) miscellaneous expenses. Internal Revenue Manual
§5.15.1.8 (Oct. 2, 2009), http://www.irs.gov/irm/part5/irm_05-015
001.html#d0e1012 (all Internet materials as visited Jan. 7, 2011, and
available in Clerk of Court’s case file). The Local Standards authorize
deductions for two kinds of expenses: (1) housing and utilities; and (2)
transportation. Id., §5.15.1.9.
4 RANSOM v. FIA CARD SERVICES, N. A.

Opinion of the Court

tables and what the amounts listed in them mean.
The Local Standards include an allowance for transpor
tation expenses, divided into vehicle “Ownership Costs”
and vehicle “Operating Costs.”3 At the time Ransom filed
for bankruptcy, the “Ownership Costs” table appeared as
follows:
Ownership Costs
First Car Second Car
National $471 $332

App. to Brief for Respondent 5a. The Collection Financial
Standards explain that these ownership costs represent
“nationwide figures for monthly loan or lease payments,”
id., at 2a; the numerical amounts listed are “base[d] . . . on
the five-year average of new and used car financing data
compiled by the Federal Reserve Board,” id., at 3a. The
Collection Financial Standards further instruct that, in
the tax-collection context, “[i]f a taxpayer has no car pay
ment, . . . only the operating costs portion of the transpor
tation standard is used to come up with the allowable
transportation expense.” Ibid.
B
Ransom filed for Chapter 13 bankruptcy relief in July
2006. App. 1, 54. Among his liabilities, Ransom itemized
over $82,500 in unsecured debt, including a claim held by
respondent FIA Card Services, N. A. (FIA). Id., at 41.
Among his assets, Ransom listed a 2004 Toyota Camry,
valued at $14,000, which he owns free of any debt. Id., at
38, 49, 52.
For purposes of the means test, Ransom reported in
——————
3 Although
both components of the transportation allowance are listed
in the Local Standards, only the operating-cost expense amounts vary
by geography; in contrast, the IRS provides a nationwide figure for
ownership costs.
 Cite as: 562 U. S. ____ (2011) 5

Opinion of the Court

come of $4,248.56 per month. Id., at 46. He also listed
monthly expenses totaling $4,038.01. Id., at 53. In de
termining those expenses, Ransom claimed a car
ownership deduction of $471 for the Camry, the full
amount specified in the IRS’s “Ownership Costs” table.
Id., at 49. Ransom listed a separate deduction of $338 for
car-operating costs. Ibid. Based on these figures, Ransom
had disposable income of $210.55 per month. Id., at 53.
Ransom proposed a 5-year plan that would result in
repayment of approximately 25% of his unsecured debt.
Id., at 55. FIA objected to confirmation of the plan on the
ground that it did not direct all of Ransom’s disposable
income to unsecured creditors. Id., at 64. In particular,
FIA argued that Ransom should not have claimed the car
ownership allowance because he does not make loan or
lease payments on his car. Id., at 67. FIA noted that
without this allowance, Ransom’s disposable income would
be $681.55—the $210.55 he reported plus the $471 he
deducted for vehicle ownership. Id., at 71. The difference
over the 60 months of the plan amounts to about $28,000.
C
The Bankruptcy Court denied confirmation of Ransom’s
plan. App. to Pet. for Cert. 48. The court held that Ran
som could deduct a vehicle-ownership expense only “if he
is currently making loan or lease payments on that vehi
cle.” Id., at 41.
Ransom appealed to the Ninth Circuit Bankruptcy
Appellate Panel, which affirmed. In re Ransom, 380 B. R.
799, 808–809 (2007). The panel reasoned that an “expense
[amount] becomes relevant to the debtor (i.e., appropriate
or applicable to the debtor) when he or she in fact has such
an expense.” Id., at 807. “[W]hat is important,” the panel
noted, “is the payments that debtors actually make, not
how many cars they own, because [those] payments . . .
are what actually affect their ability to” reimburse unse
6 RANSOM v. FIA CARD SERVICES, N. A.

Opinion of the Court

cured creditors. Ibid.
The United States Court of Appeals for the Ninth Cir
cuit affirmed. In re Ransom, 577 F. 3d 1026, 1027 (2009).
The plain language of the statute, the court held, “does not
allow a debtor to deduct an ‘ownership cost’ . . . that the
debtor does not have.” Id., at 1030. The court observed
that “[a]n ‘ownership cost’ is not an ‘expense’—either
actual or applicable—if it does not exist, period.” Ibid.
We granted a writ of certiorari to resolve a split of au
thority over whether a debtor who does not make loan or
lease payments on his car may claim the deduction for
vehicle-ownership costs. 559 U. S. ___ (2010).4 We now
affirm the Ninth Circuit’s judgment.
II
Our interpretation of the Bankruptcy Code starts
“where all such inquiries must begin: with the language of
the statute itself.” United States v. Ron Pair Enterprises,
Inc., 489 U. S. 235, 241 (1989). As noted, the provision of
the Code central to the decision of this case states:
“The debtor’s monthly expenses shall be the debtor’s
applicable monthly expense amounts specified under
the National Standards and Local Standards, and the
debtor’s actual monthly expenses for the categories
specified as Other Necessary Expenses issued by the
[IRS] for the area in which the debtor resides.”
§707(b)(2)(A)(ii)(I).
The key word in this provision is “applicable”: A debtor
may claim not all, but only “applicable” expense amounts
——————
4 Compare In re Ransom, 577 F. 3d 1026, 1027 (CA9 2009) (case be

low), with In re Washburn, 579 F. 3d 934, 935 (CA8 2009) (permitting
the allowance), In re Tate, 571 F. 3d 423, 424 (CA5 2009) (same), and
In re Ross-Tousey, 549 F. 3d 1148, 1162 (CA7 2008) (same). The ques
tion has also divided bankruptcy courts. See, e.g., In re Canales, 377
B. R. 658, 662 (Bkrtcy. Ct. CD Cal. 2007) (citing dozens of cases reach
ing opposing results).
 Cite as: 562 U. S. ____ (2011) 7

Opinion of the Court

listed in the Standards. Whether Ransom may claim the
$471 car-ownership deduction accordingly turns on
whether that expense amount is “applicable” to him.
Because the Code does not define “applicable,” we look
to the ordinary meaning of the term. See, e.g., Hamilton
v. Lanning, 560 U. S. ___, ___ (2010) (slip op., at 6). “Ap
plicable” means “capable of being applied: having rele
vance” or “fit, suitable, or right to be applied: appropriate.”
Webster’s Third New International Dictionary 105 (2002).
See also New Oxford American Dictionary 74 (2d ed. 2005)
(“relevant or appropriate”); 1 Oxford English Dictionary
575 (2d ed. 1989) (“[c]apable of being applied” or “[f]it or
suitable for its purpose, appropriate”). So an expense
amount is “applicable” within the plain meaning of the
statute when it is appropriate, relevant, suitable, or fit.
What makes an expense amount “applicable” in this
sense (appropriate, relevant, suitable, or fit) is most natu
rally understood to be its correspondence to an individual
debtor’s financial circumstances. Rather than authorizing
all debtors to take deductions in all listed categories,
Congress established a filter: A debtor may claim a deduc
tion from a National or Local Standard table (like “[Car]
Ownership Costs”) if but only if that deduction is appro
priate for him. And a deduction is so appropriate only if
the debtor has costs corresponding to the category covered
by the table—that is, only if the debtor will incur that kind
of expense during the life of the plan. The statute under
scores the necessity of making such an individualized
determination by referring to “the debtor’s applicable
monthly expense amounts,” §707(b)(2)(A)(ii)(I) (emphasis
added)—in other words, the expense amounts applicable
(appropriate, etc.) to each particular debtor. Identifying
these amounts requires looking at the financial situation
of the debtor and asking whether a National or Local
Standard table is relevant to him.
If Congress had not wanted to separate in this way
8 RANSOM v. FIA CARD SERVICES, N. A.

Opinion of the Court

debtors who qualify for an allowance from those who do
not, it could have omitted the term “applicable” altogether.
Without that word, all debtors would be eligible to claim a
deduction for each category listed in the Standards. Con
gress presumably included “applicable” to achieve a differ
ent result. See Leocal v. Ashcroft, 543 U. S. 1, 12 (2004)
(“[W]e must give effect to every word of a statute wherever
possible”). Interpreting the statute to require a threshold
determination of eligibility ensures that the term “appli
cable” carries meaning, as each word in a statute should.
This reading of “applicable” also draws support from the
statutory context. The Code initially defines a debtor’s
disposable income as his “current monthly income . . . less
amounts reasonably necessary to be expended.” §1325(b)(2)
(emphasis added). The statute then instructs that
“[a]mounts reasonably necessary to be expended . . . shall
be determined in accordance with” the means test.
§1325(b)(3). Because Congress intended the means test to
approximate the debtor’s reasonable expenditures on
essential items, a debtor should be required to qualify for
a deduction by actually incurring an expense in the rele
vant category. If a debtor will not have a particular kind
of expense during his plan, an allowance to cover that cost
is not “reasonably necessary” within the meaning of the
statute.5
Finally, consideration of BAPCPA’s purpose strengthens
our reading of the term “applicable.” Congress designed
——————
5 This interpretation also avoids the anomalous result of granting

preferential treatment to individuals with above-median income.
Because the means test does not apply to Chapter 13 debtors whose
incomes are below the median, those debtors must prove on a case-by
case basis that each claimed expense is reasonably necessary. See
§§1325(b)(2) and (3). If a below-median-income debtor cannot take a
deduction for a nonexistent expense, we doubt Congress meant to
provide such an allowance to an above-median-income debtor—the very
kind of debtor whose perceived abuse of the bankruptcy system in
spired Congress to enact the means test.
 Cite as: 562 U. S. ____ (2011) 9

Opinion of the Court

the means test to measure debtors’ disposable income and,
in that way, “to ensure that [they] repay creditors the
maximum they can afford.” H. R. Rep., at 2. This purpose
is best achieved by interpreting the means test, consistent
with the statutory text, to reflect a debtor’s ability to
afford repayment. Cf. Hamilton, 560 U. S., at ___ (slip op.,
at 14) (rejecting an interpretation of the Bankruptcy Code
that “would produce [the] senseless resul[t]” of “deny[ing]
creditors payments that the debtor could easily make”).
Requiring a debtor to incur the kind of expenses for which
he claims a means-test deduction thus advances
BAPCPA’s objectives.
Because we conclude that a person cannot claim an
allowance for vehicle-ownership costs unless he has some
expense falling within that category, the question in this
case becomes: What expenses does the vehicle-ownership
category cover? If it covers loan and lease payments alone,
Ransom does not qualify, because he has no such expense.
Only if that category also covers other costs associ
ated with having a car would Ransom be entitled to this
deduction.
The less inclusive understanding is the right one: The
ownership category encompasses the costs of a car loan or
lease and nothing more. As noted earlier, the numerical
amounts listed in the “Ownership Costs” table are “base[d]
. . . on the five-year average of new and used car financing
data compiled by the Federal Reserve Board.” App. to
Brief for Respondent 3a. In other words, the sum $471 is
the average monthly payment for loans and leases na
tionwide; it is not intended to estimate other conceivable
expenses associated with maintaining a car. The Stan
dards do account for those additional expenses, but in a
different way: They are mainly the province of the sepa
rate deduction for vehicle “Operating Costs,” which in
clude payments for “[v]ehicle insurance, . . . maintenance,
fuel, state and local registration, required inspection,
10 RANSOM v. FIA CARD SERVICES, N. A.

Opinion of the Court

parking fees, tolls, [and] driver’s license.” Internal Rev-
enue Manual §§5.15.1.7 and 5.15.1.8 (May 1, 2004),
reprinted in App. to Brief for Respondent 16a, 20a; see
also IRS, Collection Financial Standards (Feb. 19, 2010),
http://www.irs.gov/individuals/article/0,,id=96543,00.html.6
A person who owns a car free and clear is entitled to claim
the “Operating Costs” deduction for all these expenses of
driving—and Ransom in fact did so, to the tune of $338.
But such a person is not entitled to claim the “Ownership
Costs” deduction, because that allowance is for the sepa
rate costs of a car loan or lease.
The Collection Financial Standards—the IRS’s explana
tory guidelines to the National and Local Standards—
explicitly recognize this distinction between ownership
and operating costs, making clear that individuals who
have a car but make no loan or lease payments may claim
only the operating allowance. App. to Brief for Respon
dent 3a; see supra, at 4. Although the statute does not
incorporate the IRS’s guidelines, courts may consult this
material in interpreting the National and Local Stan
dards; after all, the IRS uses those tables for a similar
purpose—to determine how much money a delinquent
taxpayer can afford to pay the Government. The guide
lines of course cannot control if they are at odds with the
statutory language. But here, the Collection Financial
Standards’ treatment of the car-ownership deduction
reinforces our conclusion that, under the statute, a debtor
seeking to claim this deduction must make some loan or
lease payments.7
——————
6 In addition, the IRS has categorized taxes, including those associ

ated with car ownership, as an “Other Necessary Expens[e],” for which
a debtor may take a deduction. See App. to Brief for Respondent 26a;
Brief for United States as Amicus Curiae 16, n. 4.
7 Because the dissent appears to misunderstand our use of the Collec

tion Financial Standards, and because it may be important for future
cases to be clear on this point, we emphasize again that the statute
 Cite as: 562 U. S. ____ (2011) 11

Opinion of the Court

Because Ransom owns his vehicle free and clear of any
encumbrance, he incurs no expense in the “Ownership
Costs” category of the Local Standards. Accordingly, the
car-ownership expense amount is not “applicable” to him,
and the Ninth Circuit correctly denied that deduction.
III
Ransom’s argument to the contrary relies on a different
interpretation of the key word “applicable,” an objection to
our view of the scope of the “Ownership Costs” category,
and a criticism of the policy implications of our approach.
We do not think these claims persuasive.
A
Ransom first offers another understanding of the term
“applicable.” A debtor, he says, determines his “applica
ble” deductions by locating the box in each National or
Local Standard table that corresponds to his geographic
location, income, family size, or number of cars. Under
this approach, a debtor “consult[s] the table[s] alone” to
determine his appropriate expense amounts. Reply Brief
for Petitioner 16. Because he has one car, Ransom argues
that his “applicable” allowance is the sum listed in the
first column of the “Ownership Costs” table ($471); if he
had a second vehicle, the amount in the second column
($332) would also be “applicable.” On this approach, the
word “applicable” serves a function wholly internal to the
tables; rather than filtering out debtors for whom a deduc
tion is not at all suitable, the term merely directs each
——————
does not “incorporat[e]” or otherwise “impor[t]” the IRS’s guidance.
Post, at 1, 4 (opinion of SCALIA, J.). The dissent questions what possible
basis except incorporation could justify our consulting the IRS’s view,
post, at 4, n., but we think that basis obvious: The IRS creates the
National and Local Standards referenced in the statute, revises them
as it deems necessary, and uses them every day. The agency might,
therefore, have something insightful and persuasive (albeit not control
ling) to say about them.
12 RANSOM v. FIA CARD SERVICES, N. A.

Opinion of the Court

debtor to the correct box (and associated dollar amount of
deduction) within every table.
This alternative reading of “applicable” fails to comport
with the statute’s text, context, or purpose. As intimated
earlier, supra, at 7–8, Ransom’s interpretation would
render the term “applicable” superfluous. Assume Con
gress had omitted that word and simply authorized a
deduction of “the debtor’s monthly expense amounts”
specified in the Standards. That language, most naturally
read, would direct each debtor to locate the box in every
table corresponding to his location, income, family size, or
number of cars and to deduct the amount stated. In other
words, the language would instruct the debtor to use the
exact approach Ransom urges. The word “applicable” is
not necessary to accomplish that result; it is necessary
only for the different purpose of dividing debtors eligible to
make use of the tables from those who are not. Further,
Ransom’s reading of “applicable” would sever the connec
tion between the means test and the statutory provision it
is meant to implement—the authorization of an allowance
for (but only for) “reasonably necessary” expenses. Ex
penses that are wholly fictional are not easily thought of
as reasonably necessary. And finally, Ransom’s interpre
tation would run counter to the statute’s overall purpose of
ensuring that debtors repay creditors to the extent they
can—here, by shielding some $28,000 that he does not in
fact need for loan or lease payments.
As against all this, Ransom argues that his reading
is necessary to account for the means test’s distinction
between “applicable” and “actual” expenses—more fully
stated, between the phrase “applicable monthly expense
amounts” specified in the Standards and the phrase “ac
tual monthly expenses for . . . Other Necessary Expenses.”
§707(b)(2)(A)(ii)(I) (emphasis added). The latter phrase
enables a debtor to deduct his actual expenses in particu
lar categories that the IRS designates relating mainly to
 Cite as: 562 U. S. ____ (2011) 13

Opinion of the Court

taxpayers’ health and welfare. Internal Revenue Manual
§5.15.1.10(1), http://www.irs.gov/irm/part5/ irm_05-015
001.html#d0e1381. According to Ransom, “applicable”
cannot mean the same thing as “actual.” Brief for Peti
tioner 40. He thus concludes that “an ‘applicable’ expense
can be claimed [under the means test] even if no ‘actual’
expense was incurred.” Ibid.
Our interpretation of the statute, however, equally
avoids conflating “applicable” with “actual” costs. Al
though the expense amounts in the Standards apply only
if the debtor incurs the relevant expense, the debtor’s out
of-pocket cost may well not control the amount of the
deduction. If a debtor’s actual expenses exceed the
amounts listed in the tables, for example, the debtor may
claim an allowance only for the specified sum, rather than
for his real expenditures.8 For the Other Necessary Ex
pense categories, by contrast, the debtor may deduct his
actual expenses, no matter how high they are.9 Our read

——————
8 The parties and the Solicitor General as amicus curiae dispute the

proper deduction for a debtor who has expenses that are lower than the
amounts listed in the Local Standards. Ransom argues that a debtor
may claim the specified expense amount in full regardless of his out-of
pocket costs. Brief for Petitioner 24–27. The Government concurs with
this view, provided (as we require) that a debtor has some expense
relating to the deduction. See Brief for United States as Amicus Curiae
19–21. FIA, relying on the IRS’s practice, contends to the contrary that
a debtor may claim only his actual expenditures in this circumstance.
Brief for Respondent 12, 45–46 (arguing that the Local Standards
function as caps). We decline to resolve this issue. Because Ransom
incurs no ownership expense at all, the car-ownership allowance is not
applicable to him in the first instance. Ransom is therefore not entitled
to a deduction under either approach.
9 For the same reason, the allowance for “applicable monthly expense

amounts” at issue here differs from the additional allowances that the
dissent cites for the deduction of actual expenditures. See post, at 3–4
(noting allowances for “actual expenses” for care of an elderly or chroni
cally ill household member, §707(b)(2)(A)(ii)(II), and for home energy
costs, §707(b)(2)(A)(ii)(V)).
14 RANSOM v. FIA CARD SERVICES, N. A.

Opinion of the Court

ing of the means test thus gives full effect to “the distinc
tion between ‘applicable’ and ‘actual’ without taking a
further step to conclude that ‘applicable’ means ‘nonexis
tent.’ ” In re Ross-Tousey, 368 B. R. 762, 765 (Bkrtcy. Ct.
ED Wis. 2007), rev’d, 549 F. 3d 1148 (CA7 2008).
Finally, Ransom’s reading of “applicable” may not even
answer the essential question: whether a debtor may
claim a deduction. “[C]onsult[ing] the table[s] alone” to
determine a debtor’s deduction, as Ransom urges us to do,
Reply Brief for Petitioner 16, often will not be sufficient
because the tables are not self-defining. This case pro
vides a prime example. The “Ownership Costs” table
features two columns labeled “First Car” and “Second
Car.” See supra, at 4. Standing alone, the table does not
specify whether it refers to the first and second cars owned
(as Ransom avers), or the first and second cars for which
the debtor incurs ownership costs (as FIA maintains)—and
so the table does not resolve the issue in dispute.10 See
In re Kimbro, 389 B. R. 518, 533 (Bkrtcy. App. Panel CA6
2008) (Fulton, J., dissenting) (“[O]ne cannot really ‘just
——————
10 The interpretive problem is not, as the dissent suggests, “whether
to claim a deduction for one car or for two,” post, at 3, but rather
whether to claim a deduction for any car that is owned if the debtor has
no ownership costs. Indeed, if we had to decide this question on the
basis of the table alone, we might well decide that a debtor who does
not make loan or lease payments cannot claim an allowance. The table,
after all, is titled “Ownership Costs”—suggesting that it applies to
those debtors who incur such costs. And as noted earlier, the dollar
amounts in the table represent average automobile loan and lease
payments nationwide (with all other car-related expenses approxi
mated in the separate “Operating Costs” table). See supra, at 9–10.
Ransom himself concedes that not every debtor falls within the terms of
this table; he would exclude, and thus prohibit from taking a deduction,
a person who does not own a car. Brief for Petitioner 33. In like
manner, the four corners of the table appear to exclude an additional
group—debtors like Ransom who own their cars free and clear and so
do not make the loan or lease payments that constitute “Ownership
Costs.”
 Cite as: 562 U. S. ____ (2011) 15

Opinion of the Court

look up’ dollar amounts in the tables without either refer
ring to IRS guidelines for using the tables or imposing pre
existing assumptions about how [they] are to be navi
gated” (footnote omitted)). Some amount of interpretation
is necessary to decide what the deduction is for and
whether it is applicable to Ransom; and so we are brought
back full circle to our prior analysis.
B
Ransom next argues that viewing the car-ownership
deduction as covering no more than loan and lease pay
ments is inconsistent with a separate sentence of the
means test that provides: “Notwithstanding any other
provision of this clause, the monthly expenses of the
debtor shall not include any payments for debts.”
§707(b)(2)(A)(ii)(I). The car-ownership deduction cannot
comprise only loan and lease payments, Ransom contends,
because those payments are always debts. See Brief for
Petitioner 28, 44–45.
Ransom ignores that the “notwithstanding” sentence
governs the full panoply of deductions under the National
and Local Standards and the Other Necessary Expense
categories. We hesitate to rely on that general provision
to interpret the content of the car-ownership deduction
because Congress did not draft the former with the latter
specially in mind; any friction between the two likely
reflects only a lack of attention to how an across-the-board
exclusion of debt payments would correspond to a particu
lar IRS allowance.11 Further, the “notwithstanding” sen
tence by its terms functions only to exclude, and not to
authorize, deductions. It cannot establish an allowance
——————
11 Because Ransom does not make payments on his car, we need not

and do not resolve how the “notwithstanding” sentence affects the
vehicle-ownership deduction when a debtor has a loan or lease expense.
See Brief for United States as Amicus Curiae 23, n. 5 (offering alterna
tive views on this question); Tr. of Oral Arg. 51–52.
16 RANSOM v. FIA CARD SERVICES, N. A.

Opinion of the Court

for non-loan or -lease ownership costs that no National or
Local Standard covers. Accordingly, the “notwithstand
ing” sentence does nothing to alter our conclusion that the
“Ownership Costs” table does not apply to a debtor whose
car is not encumbered.
C
Ransom finally contends that his view of the means test
is necessary to avoid senseless results not intended by
Congress. At the outset, we note that the policy concerns
Ransom emphasizes pale beside one his reading creates:
His interpretation, as we have explained, would frustrate
BAPCPA’s core purpose of ensuring that debtors devote
their full disposable income to repaying creditors. See
supra, at 8–9. We nonetheless address each of Ransom’s
policy arguments in turn.
Ransom first points out a troubling anomaly: Under our
interpretation, “[d]ebtors can time their bankruptcy filing
to take place while they still have a few car payments left,
thus retaining an ownership deduction which they would
lose if they filed just after making their last payment.”
Brief for Petitioner 54. Indeed, a debtor with only a single
car payment remaining, Ransom notes, is eligible to claim
a monthly ownership deduction. Id., at 15, 52.
But this kind of oddity is the inevitable result of a stan
dardized formula like the means test, even more under
Ransom’s reading than under ours. Such formulas are by
their nature over- and under-inclusive. In eliminating the
pre-BAPCPA case-by-case adjudication of above-median
income debtors’ expenses, on the ground that it leant itself
to abuse, Congress chose to tolerate the occasional peculi
arity that a brighter-line test produces. And Ransom’s
alternative reading of the statute would spawn its own
anomalies—even placing to one side the fundamental
strangeness of giving a debtor an allowance for loan or
lease payments when he has not a penny of loan or lease
 Cite as: 562 U. S. ____ (2011) 17

Opinion of the Court

costs. On Ransom’s view, for example, a debtor entering
bankruptcy might purchase for a song a junkyard car—“an
old, rusted pile of scrap metal [that would] si[t] on cinder
blocks in his backyard,” In re Brown, 376 B. R. 601, 607
(Bkrtcy. Ct. SD Tex. 2007)—in order to deduct the $471
car-ownership expense and reduce his payment to credi
tors by that amount. We do not see why Congress would
have preferred that result to the one that worries Ransom.
That is especially so because creditors may well be able to
remedy Ransom’s “one payment left” problem. If car
payments cease during the life of the plan, just as if other
financial circumstances change, an unsecured creditor
may move to modify the plan to increase the amount the
debtor must repay. See 11 U. S. C. §1329(a)(1).
Ransom next contends that denying the ownership
allowance to debtors in his position “sends entirely the
wrong message, namely, that it is advantageous to be
deeply in debt on motor vehicle loans, rather than to pay
them off.” Brief for Petitioner 55. But the choice here is
not between thrifty savers and profligate borrowers, as
Ransom would have it. Money is fungible: The $14,000
that Ransom spent to purchase his Camry outright was
money he did not devote to paying down his credit card
debt, and Congress did not express a preference for one
use of these funds over the other. Further, Ransom’s
argument mistakes what the deductions in the means test
are meant to accomplish. Rather than effecting any broad
federal policy as to saving or borrowing, the deductions
serve merely to ensure that debtors in bankruptcy can
afford essential items. The car-ownership allowance thus
safeguards a debtor’s ability to retain a car throughout the
plan period. If the debtor already owns a car outright, he
has no need for this protection.
Ransom finally argues that a debtor who owns his car
free and clear may need to replace it during the life of the
plan; “[g]ranting the ownership cost deduction to a vehicle
18 RANSOM v. FIA CARD SERVICES, N. A.

Opinion of the Court

that is owned outright,” he states, “accords best with
economic reality.” Id., at 52. In essence, Ransom seeks an
emergency cushion for car owners. But nothing in the
statute authorizes such a cushion, which all debtors pre
sumably would like in the event some unexpected need
arises. And a person who enters bankruptcy without any
car at all may also have to buy one during the plan period;
yet Ransom concedes that a person in this position cannot
claim the ownership deduction. Tr. of Oral Arg. 20. The
appropriate way to account for unanticipated expenses
like a new vehicle purchase is not to distort the scope of a
deduction, but to use the method that the Code provides
for all Chapter 13 debtors (and their creditors): modifica
tion of the plan in light of changed circumstances. See
§1329(a)(1); see also supra, at 17.
IV
Based on BAPCPA’s text, context, and purpose, we hold
that the Local Standard expense amount for transporta
tion “Ownership Costs” is not “applicable” to a debtor who
will not incur any such costs during his bankruptcy plan.
Because the “Ownership Costs” category covers only loan
and lease payments and because Ransom owns his car free
from any debt or obligation, he may not claim the allow
ance. In short, Ransom may not deduct loan or lease
expenses when he does not have any. We therefore affirm
the judgment of the Ninth Circuit.
It is so ordered.
 Cite as: 562 U. S. ____ (2011) 1

SCALIA, J., dissenting

SUPREME COURT OF THE UNITED STATES
_________________

No. 09–907
_________________

JASON M. RANSOM, PETITIONER v. FIA CARD

SERVICES, N. A., FKA MBNA AMERICA

BANK, N. A.

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF

APPEALS FOR THE NINTH CIRCUIT

[January 11, 2011]

JUSTICE SCALIA, dissenting.
I would reverse the judgment of the Ninth Circuit. I
agree with the conclusion of the three other Courts of
Appeals to address the question: that a debtor who owns a
car free and clear is entitled to the car-ownership allow
ance. See In re Washburn, 579 F. 3d 934 (CA8 2009); In re
Tate, 571 F. 3d 423 (CA5 2009); In re Ross-Tousey, 549 F.
3d 1148 (CA7 2008).
The statutory text at issue is the phrase enacted in the
Bankruptcy Abuse Prevention and Consumer Protection
Act of 2005 (BAPCPA), “applicable monthly expense
amounts specified under the National Standards and
Local Standards,” 11 U. S. C. §707(b)(2)(A)(ii)(I). The
Court holds that the word “applicable” in this provision
imports into the Local Standards a directive in the Inter
nal Revenue Service’s Collection Financial Standards,
which have as their stated purpose “to help determine a
taxpayer’s ability to pay a delinquent tax liability,” App. to
Brief for Respondent 1a. That directive says that “[i]f a
taxpayer has no car payment,” the Ownership Cost provi
sions of the Local Standards will not apply. Id., at 3a.
That directive forms no part of the Local Standards to
which the statute refers; and the fact that portions of the
Local Standards are to be disregarded for revenue
2 RANSOM v. FIA CARD SERVICES, N. A.

SCALIA, J., dissenting

collection purposes says nothing about whether they are to
be disregarded for purposes of Chapter 13 of the Bank
ruptcy Code. The Court believes, however, that unless the
IRS’s Collection Financial Standards are imported into the
Local Standards, the word “applicable” would do no work,
violating the principle that “ ‘we must give effect to every
word of a statute wherever possible.’ ” Ante, at 8 (quoting
Leocal v. Ashcroft, 543 U. S. 1, 12 (2004)). I disagree. The
canon against superfluity is not a canon against verbosity.
When a thought could have been expressed more con
cisely, one does not always have to cast about for some
additional meaning to the word or phrase that could have
been dispensed with. This has always been understood. A
House of Lords opinion holds, for example, that in the
phrase “ ‘in addition to and not in derogation of ’ ” the last
part adds nothing but emphasis. Davies v. Powell Duffryn
Associated Collieries, Ltd., [1942] A. C. 601, 607.
It seems to me that is the situation here. To be sure,
one can say “according to the attached table”; but it is
acceptable (and indeed I think more common) to say “ac
cording to the applicable provisions of the attached table.”
That seems to me the fairest reading of “applicable
monthly expense amounts specified under the National
Standards and Local Standards.” That is especially so for
the Ownership Costs portion of the Local Standards,
which had no column titled “No Car.” Here the expense
amount would be that shown for one car (which is all the
debtor here owned) rather than that shown for two cars;
and it would be no expense amount if the debtor owned no
car, since there is no “applicable” provision for that on the
table. For operating and public transportation costs, the
“applicable” amount would similarly be the amount pro
vided by the Local Standards for the geographic region in
which the debtor resides. (The debtor would not first be
required to prove that he actually operates the cars that
he owns, or, if does not own a car, that he actually uses
 Cite as: 562 U. S. ____ (2011) 3

SCALIA, J., dissenting

public transportation.) The Court claims that the tables
“are not self-defining,” and that “[s]ome amount of inter
pretation” is necessary in choosing whether to claim a
deduction at all, for one car, or for two. Ante, at 14–15.
But this problem seems to me more metaphysical than
practical. The point of the statutory language is to entitle
debtors who own cars to an ownership deduction, and I
have little doubt that debtors will be able to choose cor
rectly whether to claim a deduction for one car or for two.
If the meaning attributed to the word by the Court were
intended, it would have been most precise to say “monthly
expense amounts specified under the National Standards
and Local Standards, if applicable for IRS collection pur
poses.” And even if utter precision was too much to ex
pect, it would at least have been more natural to say
“monthly expense amounts specified under the National
Standards and Local Standards, if applicable.” That
would make it clear that amounts specified under those
Standards may nonetheless not be applicable, justifying
(perhaps) resort to some source other than the Standards
themselves to give meaning to the condition. The very
next paragraph of the Bankruptcy Code uses that formu
lation (“if applicable”) to limit to actual expenses the
deduction for care of an elderly or chronically ill household
member: “[T]he debtor’s monthly expenses may include, if
applicable, the continuation of actual expenses paid by the
debtor that are reasonable and necessary” for that pur
pose. 11 U. S. C. §707(b)(2)(A)(ii)(II) (emphasis added).
Elsewhere as well, the Code makes it very clear when
prescribed deductions are limited to actual expenditures.
Section 707(b)(2)(A)(ii)(I) itself authorizes deductions for a
host of expenses—health and disability insurance, for
example—only to the extent that they are “actual . . .
expenses” that are “reasonably necessary.” Additional
deductions for energy are allowed, but again only if they
are “actual expenses” that are “reasonable and necessary.”
4 RANSOM v. FIA CARD SERVICES, N. A.

SCALIA, J., dissenting

§707(b)(2)(A)(ii)(V). Given the clarity of those limitations
to actual outlays, it seems strange for Congress to limit
the car-ownership deduction to the somewhat peculiar
category “cars subject to any amount whatever of out
standing indebtedness” by the mere word “applicable,”
meant as incorporation of a limitation that appears in
instructions to IRS agents.*
I do not find the normal meaning of the text undermined
by the fact that it produces a situation in which a
debtor who owes no payments on his car nonetheless gets
the operating-expense allowance. For the Court’s more
strained interpretation still produces a situation in which
a debtor who owes only a single remaining payment on his
car gets the full allowance. As for the Court’s imagined
horrible in which “a debtor entering bankruptcy might
purchase for a song a junkyard car,” ante, at 17: That is
fairly matched by the imagined horrible that, under the
Court’s scheme, a debtor entering bankruptcy might pur
chase a junkyard car for a song plus a $10 promissory note
payable over several years. He would get the full owner
ship expense deduction.
Thus, the Court’s interpretation does not, as promised,
——————
* The Court protests that I misunderstand its use of the Collection
Financial Standards. Its opinion does not, it says, find them to be
incorporated by the Bankruptcy Code; they simply “reinforc[e] our
conclusion that . . . a debtor seeking to claim this deduction must make
some loan or lease payments.” Ante, at 10. True enough, the opinion
says that the Bankruptcy Code “does not incorporate the IRS’s guide
lines,” but it immediately continues that “courts may consult this
material in interpreting the National and Local Standards” so long as it
is not “at odds with the statutory language.” Ibid. In the present
context, the real-world difference between finding the guidelines
incorporated and finding it appropriate to consult them escapes me,
since I can imagine no basis for consulting them unless Congress meant
them to be consulted, which would mean they are incorporated. And
without incorporation, they are at odds with the statutory language,
which otherwise contains no hint that eligibility for a Car Ownership
deduction requires anything other than ownership of a car.
 Cite as: 562 U. S. ____ (2011) 5

SCALIA, J., dissenting

maintain “the connection between the means test and the
statutory provision it is meant to implement—the authori
zation of an allowance for (but only for) ‘reasonably neces
sary’ expenses,” ante, at 12. Nor do I think this difficulty
is eliminated by the deus ex machina of 11 U. S. C.
§1329(a)(1), which according to the Court would allow an
unsecured creditor to “move to modify the plan to increase
the amount the debtor must repay,” ante, at 17. Apart
from the fact that, as a practical matter, the sums in
volved would hardly make this worth the legal costs,
allowing such ongoing revisions of matters specifically
covered by the rigid means test would return us to “the
pre-BAPCPA case-by-case adjudication of above-median
income debtors’ expenses,” ante, at 16. If the BAPCPA
had thought such adjustments necessary, surely it would
have taken the much simpler and more logical step of
providing going in that the ownership expense allowance
would apply only so long as monthly payments were due.
The reality is, to describe it in the Court’s own terms,
that occasional overallowance (or, for that matter, under
allowance) “is the inevitable result of a standardized
formula like the means test . . . . Congress chose to toler
ate the occasional peculiarity that a brighter-line test
produces.” Ibid. Our job, it seems to me, is not to elimi
nate or reduce those “oddit[ies],” ibid., but to give the
formula Congress adopted its fairest meaning. In my
judgment the “applicable monthly expense amounts” for
operating costs “specified under the . . . Local Standards,”
are the amounts specified in those Standards for either
one car or two cars, whichever of those is applicable.