Form 122A-2 Marital Adjustment

[jabe71]

Filing Chapter 7 Married-Spouse not filing. Just a quick question on Marital Adjustments..We have listed 1. Wife's 401k contribution and 401k loan repayment. 2. Credit card payment's in wife's name only (only $300.00) 3. Payroll Deductions (Health, Life, Disability).

My question is, do we list her payroll taxes here or on line 16 Taxes. I wouldn't think it matters as long as you don't double dip. We are only $2,000 over the median yearly income. This is a pretty straight forward Chapter 7 case. We don't own any property and this is only credit card debt ($75,000). I do have a car payment which I am planning on re-affirming with the credit union. Thanks for the help

[justbroke]

Welcome to BKForum!

I'm assuming you're trying to file without an attorney. Please know that since you are (even) slightly over the median, that could draw scrutiny from the United States Trustee (UST). In addition, cases where only one of a married couple files, and claims most of the income as "marital adjustment" can cause even more headaches.

I haven't needed to use the marital adjustment and I live in Florida.

Please see the Trustee Guidelines as posted by the Executive Office of the United States Trustee in their Chapter 7 Line By Line guidebook for Trustees. Specifically, look at line 17;

Line 17, Marital adjustment. All income of the non-debtor spouse should be included, except the following expenses of the non-debtor spouse may be excluded:

• withholding taxes;
• student loan payments;
• prior support obligations;
• debt payments on which only the non-filing spouse is legally liable and where the consideration for the loan exclusively benefits the non-filing spouse. (Credit cards used to pay for household expenses may not be deducted on Line 17).

Take notice of and pay attention to the last bullet (the part that I highlighted). This is so that you don't actually "double" count expenses that are charged to a card, but getting credit in the Means Test. I can't tell you if the UST will become "interested" in your case or if they'll grill you on the non-filing spouse. It is, however, common for the UST to become "interested" in over-the-median income cases (for Chapter 7s), especially when there is a non-filing spouse.

I just wanted you to be aware of that last condition on the Marital Adjustments. Be aware that these are just the OUST's opinion on those items, but it could still be a fight over the marital adjustment(s).

I want to welcome to BKForum one more time and let us know how you're doing.

[jabe71]

We are barely even using a fraction of her income in the marital adjustment section. Technically we could delete her credit card adjustment of $300 and use her cell phone adjustment of $150. Either or it isn’t going to make much difference.

I’m not worried about the Trustee looking all they want. I was more concerned about getting items in the correct location.

And yes I am filing without an attorney.

[jabe71]

You also state that you have never had to use the marital adjustment...are you saying you have never had a case of a married debtor filing by their self? If so, where did you report the other spouse’s taxes withheld? Why wouldn’t someone use the marital adjustment if the deductions are valid? I believe the marital adjustment is included in the means test to help filers that are on the border of the income guidelines.

I mean why would they even include the question if they didn’t want people to use it. Seems to me it is there for a reason

[justbroke]

I filed without my spouse, but my spouse didn't have income... so it was a non-issue for me.

They include it because the bankruptcy law(s) allow for a debtor to file without their spouse. The scrutiny comes because many dual-income households are over-the-median on average, so they are already subject to scrutiny (the Means Test itself).

The marital adjustment is specifically to back out non-filing spouse income that is used to pay the non-filing spouse's debt. This is due to the fact that all marital income must be included as a baseline as the Means Test presumes that all marital income contributes to the household.