means test:relatives, partners, roommates, etc

[treehugger1]

After reading Mrs H's post on the mother in the household, I'll ahre my experience when first consulting attorneys. I have a roommate who contributes nothing to rent, my food, autos, auto insurance, utilities, etc. I have a solid record that all payments are made by me.

Two attorneys stated that I would need to include my roommate's income on the means test, but not on schedule I and J. They stated that the local trustee required all "household" income.

Two different attorneys stated they would not include the roommate's income in the mean's test, as my income alone put me way, way over the means test.

After reading about Mrs H's discussion of her mother, I wonder if relatives, roommates, etc incomes are meant to be included in the schedule 22 but do not need to be included for I and J. I think I remember a discussion somewhere on this site, but can't find it.

Any thoughts on whether an inlaw who makes "no contribution" to the living expenses can be ignored on schedules, including the means test? Such a person is not a direct party to the BK unless they make contributions. What gives with attorneys coming up with two different requirements?

[IvoryAngel]

I have almost the same issue. I have a roommate and we split the bills however because I hardly make enough to get by sometimes she picks up the difference. I asked the attorney about it and he said it could go either way you can list her and her paying you or you could not list it at all and show the bills you actually pay.

I still havent decided on how to file that. I think I will just list half of all the bills that both our names are on and show the others as me paying all of. The only other problem I have is deposits.

So to answer your question...I would say you shouldn't have to list them kinda odd especially if they are not paying any bills and you cant claim them as an independent. Why even mention them??

[SinkingFast]

There have been several people here file solo that live with roommates and/or SO's. Some filed with attnys. Some filed ProSe.

None that I recall included the SO's income on the Means Test. As far as bills and property went,......... They just put down their portion of the rent, what furniture/items were theirs, any other bills that they paid themselves.

I think where these attnys are going is,............ The other people living with you contribute to the Household Expenses. That could be the basis for their point of view.

Whereas, if you have a roommate/SO/relative that lives with you and does not contribute to the benefit of the whole Household,.......... That's a whole different story.

[HenriettaHen]

I live with someone, and we have separate financial affairs. I pay some things, he pays others - we write checks from our separate accounts.

I also got very confusing answers from attorneys about including his income.

In the end, I went with the common sense approach of actually listing what he does give me, which is 60.00 per week for groceries. I included this as income.

However, I did not include his income anywhere in my petition. We are not married, so I treated it as though he were my housemate (which of course, he is).

I get really riled up about this idea of including someone else's income - income that isn't really income! I do not see how this can be legal, and the fact that a lawyer is telling you that "the local trustee requires it" is also kinda funny, isn't it? I mean a local trustee might be more demanding in the way of background material or something, but the idea that they could just arbitrarily twist the math in the means test, etc - that sounds very odd.

I see no good reason to include income that isn't yours. If your partner does give you money, just list ONLY that money as income, and be prepared to back everything up with hard copy. If you share things, report your share.

This is how I did it, and I was never given any trouble at all about it. I was asked to submit quite a bit of background paperwork, but the story was written there exactly as I described it, and there was no further inquiry.

I listed higher expenses, based on a household of 2, because I really do provide household supplies for two people. I was not questioned about it.

Because I didn't use an attorney, there was no "creativity" whatsoever in my numbers. Every cent I make goes into my checking account and right back out again, so I had a clear record of where my money came from and where it went. For other calculations, I used court-provided schedules.

Just the facts, backed up by paperwork.

And that's another thing - how is it that the attorney or trustee is "deciding" how much a person can use for expenses? The IRS tables are what determines that, NOT the trustee or the attorney. This would be like your town government levying a higher property tax rate on you than on your neighbor - just because "that's the way we do it here" ?

I don't THINK SO.

Such a racket. Buyer beware!

[IvoryAngel]

I would agree with that...if you have to include there income why wouldn't you be able to increase your household size. Seems silly to me. If I had to include the others income I would surely change my household size to add them.

[HenriettaHen]

Ivory Angel - I just noticed something in your previous post ...

"The only other problem I have is deposits. "

This is where you have to be right up front. If you are showing a deposit to your account, it's income.

You'll need to show where it came from and what you used it for. It's probably not a huge amount of money, right? So don't let it bother you.

Otherwise, your roommate's income has nothing to do with your bankruptcy.

[lrprn]

About roommates and their contribution to the Means Test income calculations....according to King's Guide to Legal Practice at http://www.bankruptcybooks.com/peer_...de_to_pra.html :



This is the legal thinking behind why a roommate's regular financial contributions to the running of the household should be counted as income on the Means Test. HTH!

[HenriettaHen]

Thank you, Lrprn, for this excellent nugget!

I think this is so confusing because these words describe birds of different feathers. Apples and oranges, almost.

The word household by itself does not refer to income. It refers to the number of people living with you, and is a determining factor for where you fall on IRS median family income table. Household is a number used to determine median family income. Not YOUR income, but the average income for that many people in a household in your state.

That median family income number from the IRS median income table gives you the maximum combined income that you (and your joint filer if you have one) can have, in order to qualify for Chap 7.

It's not median household income or household income.

The IRS expense table gives you your maximum allowable expenses according to your income. There are national standards and local standards. Local standards sometimes also use household to determine the allowable expenses.

This drove me crazy! And the lawyers can be JUST AS CONFUSED - at least in my experience.

I sprouted some gray feathers whilst laying THAT egg - sure wish I'd seen this great bit aways back, Lrprn! It's a good'un!

Here's the page from the UST website, where you can find the calculators:

http://www.usdoj.gov/ust/eo/bapcpa/20070201/meanstesting.htm

[Mrs. H]

My ears were ringing...

As you know, I can't help with this one as of yet.

I'll keep you posted on how it turns out, though.

Be well,
Mrs. H.

[HenriettaHen]

I did a little more reading about this - it seems that if you are married, then you have to list the spouse's income, even if you are filing separately or one spouse only is filing. Looks like both chapters have this requirement.

This certainly accounts for some of the confusion.

Here it is:

In order to complete the Official Bankruptcy Forms that make up the petition, statement of financial affairs, and schedules, the debtor must compile the following information:

1. A list of all creditors and the amounts and nature of their claims;
2. The source, amount, and frequency of the debtor's income;
3. A list of all of the debtor's property; and
4. A detailed list of the debtor's monthly living expenses, i.e., food, clothing, shelter, utilities, taxes, transportation, medicine, etc.

Married individuals must gather this information for their spouse regardless of whether they are filing a joint petition, separate individual petitions, or even if only one spouse is filing. In a situation where only one spouse files, the income and expenses of the non-filing spouse is required so that the court, the trustee and creditors can evaluate the household's financial position.

http://www.uscourts.gov/bankruptcycourts/bankruptcybasics/chapter7.html

This is very confusing. It appears to require that you submit the spouse's information as a duplicate set of documents, but ... do you include the totals in the individual debtor's petition?

I suppose the question is ... how does it affect the means test?

That doesn't make sense. Am I missing something?

[lrprn]

I suppose the question is ... how does it affect the means test?

On the Means Test when you fill out Part II Calculation for Monthly Income, the extra income paid toward household expenses from a non-spouse is included on Line 8. The challenge comes in sorting out exactly how much that amount should be.

Roommates often mix their expenses in a very irregular way. "Roomie, I'm short so this week can you you pay the water and electric bills and get our groceries? Then next week I'll pay the phone and cable bills and buy our gas." You get the picture. It's hard to sort out exactly how much of a regular contribution is made, and is one of the most challenging gray areas of a very badly written law.

[HenriettaHen]

I'm clear on the fact that one would only report Roomie's regular contribution - or an average contribution. This is what I did, and it was accepted.

But this idea of requiring the records of a SPOUSE, even if the spouse is not filing ....

I can see why they would want the information about the spouse.

But is the non-filing spouse's income counted in the means test?

[lrprn]

But is the non-filing spouse's income counted in the means test?

Yes, in Part II Column B. Then I believe you take the non-filing spouse's income back out in Part IV Line 17. Weird, I know. Thank Congress for this mess.

[HenriettaHen]

Well, Thar She Blows! I guess I had a mental/visual block about that line, since it's the one right under the Important One. Thank you very much, my brain was overheating.

I can now see why there is so much NONSENSE coming from lawyers about this.

Nice sneaky way to get more info, eh?

So... do the non-filing spouse's account numbers and all that information go into the public record as part of the filing spouse's bankruptcy?

Good reason not to get married!

[CityGirl]

I live with my sister. I pay her rent of $500 a month and she pays the mortgage of $1200 and the 1/2 the utilities. What do I do in this instance? I dont want her to know I'm filing, and she makes 30K more a year then me!