The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005

Evaluation of the Effects of Using IRS Expense Standards to Calculate a Debtor's Monthly Disposable Income

by Stephen J. Carroll, Noreen Clancy, Melissa A. Bradley, Jennifer Pevar, Marianne Culhane, Michaela White


Download eBook for Free

Full Document

FormatFile SizeNotes
PDF file 0.4 MB

Use Adobe Acrobat Reader version 10 or higher for the best experience.

Summary Only

FormatFile SizeNotes
PDF file 0.1 MB

Use Adobe Acrobat Reader version 10 or higher for the best experience.


Purchase Print Copy

 FormatList Price Price
Add to Cart Paperback66 pages $23.00 $18.40 20% Web Discount

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) requires that debtors filing for bankruptcy whose monthly income exceeds the median income for their household size in their state use the IRS expense standards rather than their current expenses to calculate their monthly disposable income (MDI). This change can affect both the options available to a debtor considering filing for bankruptcy and the amount the debtor must pay to creditors under a repayment plan. This report assesses this new requirement’s effects on debtors and the courts, finding the following. Similarly situated debtors may have substantially different payment obligations depending on the jurisdiction in which they live. Each bankruptcy case now requires more judicial time. The IRS standards, especially living expenses, yield larger deductions, on average, and, therefore, lower MDIs across the country. Generally, higher-income debtors gain less using the IRS standards rather than current expenses than do otherwise similar, lower-income debtors; this difference is significant for homeowners and highly so for renters.

Table of Contents

  • Chapter One


  • Chapter Two

    The Bankruptcy System

  • Chapter Three

    Effects of the Utilization of IRS Expense Standards on the Courts

  • Chapter Four

    Empirical Analyses of the Effects of IRS Expense Standard Use on Debtors

  • Chapter Five

    Summary and Conclusions

  • Appendix

    Office Focus Group Discussion Guide.

The research described in this report was prepared for the Executive Office for U.S. Trustees by the RAND Institute for Civil Justice.

This report is part of the RAND Corporation Technical report series. RAND technical reports may include research findings on a specific topic that is limited in scope or intended for a narrow audience; present discussions of the methodology employed in research; provide literature reviews, survey instruments, modeling exercises, guidelines for practitioners and research professionals, and supporting documentation; or deliver preliminary findings. All RAND reports undergo rigorous peer review to ensure that they meet high standards for research quality and objectivity.

This document and trademark(s) contained herein are protected by law. This representation of RAND intellectual property is provided for noncommercial use only. Unauthorized posting of this publication online is prohibited; linking directly to this product page is encouraged. Permission is required from RAND to reproduce, or reuse in another form, any of its research documents for commercial purposes. For information on reprint and reuse permissions, please visit

The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.