Household members Means' Test Questions

[pandacb]

My husband and I are looking at Chapter 7 in Oregon. Our 21 year old who has autism spectrum disabilities lives with us, as does his girlfriend who also seems to have "issues". They both work a very small and unpredictable number of hours at minimum wage. (through a program with the Presbyterian church, not a private employer.) We see none of that money; he uses his for car insurance and gas, she uses hers for her cell phone and health care.

They live here with us and we support them. There are no supports for "marginally handicapped" or "partially disabled" people in our state...if not for us, they would be homeless.

So, who counts for the means test? Just me and my husband? Or, just me, my husband and our son (who is our legal dependent?) Or all four of us living here?

Thanks for the help.

[pandacb]

This is a tough issue, I guess. Here's what I found on my own and I'd still love to hear from you all.

[[/B]The means test is a key feature of the 2005 BAPCPA bankruptcy amendments. It incorporates state median income figures to determine who should pay back some of their debts in a Chapter 13 plan. Median income is on a sliding scale based on family size. Consequently, the more people one can claim as household members, the higher the median income, and the easier it is to “pass” the means test (or reduce and/or shorten the required Chapter 13 payment).

There is controversy regarding who should be counted as a household member under some circumstances. The Internal Revenue Manual and the Census Bureau definitions differ on the concept of family size. Some courts have adopted the Census Bureau definition described by some as a “heads on beds” definition: namely, that anyone actually sleeping and eating in the house is a household member.

Other courts have taken a view more consistent with the stricter IRS definition requiring some support of the purported household member by the debtor. In these cases, adult children with jobs living in the house have been disallowed as family members. See, e.g., In re Jewell, 365 B.R. 796 (Bankr.S.D.Ohio 2007).
It is important to consult with experienced legal counsel on this issue. However, in general, when a person has been actually living in the debtor’s home for the six months prior to filing and has been supported, at least in part, by the debtor, there will be little controversy in counting that person towards the household size, even if the person in unrelated to the debtor.