Means test girlfriend/roommate

[rhp]

That exactly what my attorney told me. I was living with BF and i paid exactly half the utilities. So attorney claimed my half utilities as expenses for me. AND none of his income. He said i could walk away today and it wouldn't make any difference to the whole picture.
CEPT...i would have been living in my car then.

Interesting. Did your income show you could cover the expenses? I worry about the two not jiving.

[oregonpilot]

Actually not even close. I think i had probably about a -$300. With a drop in future income too.
So it was going to be closer to -100%
I thought the trustee was going to ask me how i was going to pull that one off...He never questioned it.
So i can only say how it all worked for me.
It was quite a discussion between my attorney and the senior partners on how to do it. They had a household of 1 on my means test too??????? Not sure how that was going to work out but it did.
I can only thank my lucky stars.

[BrokeinMD]

Here in MD, for my "Sig Other" I had to report his contributions in the 6 months back. He lost his job in June, and I filed in October. His contributions for April though June were included, and from July to September, 100% of the expenses were mine, so showing the big drop of his contributions, I show about $400 monthly shortfall, and that's how it stands at this time. (Boy, do we play with Peter and Paul and everyone in between. What fun!)

You've got me wondering now how expenses would be handled if I was in your shoes. I will see him tomorrow for my car reaffirm hearing. If I get a chance, I'll ask him.

[MSbklawyer]

Help me figure this cr&p out and I'll share all the secrets.

You never include a roommate's "income" on any "income" line, since it's not your income. What you do is "offset" the expenses to the extent that the roommate contributes. For example, if the rent is $1,000/month and you each pay half, your actually rental expense is $500. You list $500.

For purposes of the first section of the means test, your family size would be 2. However, when calculating expenses, you would only use 1. For example, your Part III "household" size would be 2 for calculating the median income for your State. However, if you're over-the-median, then any expenses in Section V should be based on just you solely (1).

(Noting that there are still some Trustees that argue about what defines "household" size for purposes of Section III in the Means Test.)

I think JB summed it up better than I could.

[justbroke]

So that contribution doesn't go on Schedule I, line 13(Other Monthly Income)? Will that bring into question where the moeny to pay those bills is coming from?

It might, but it's not income unless they pay it to you. What it is, however, is an offset to your expenses, so you reduce the expenses by the amount. There are arguments, still, over whether you would, if over the median, use the UST's expense numbers on Form B22A (B22C) or not. However, you would always have "actual" numbers on Schedule J.

I will add that some attorneys and Trustees see this differently and count the "room mate's" income in the income calculation. The key is, if they require you to include the income on Line 8 of Form B22A, then you get to claim the additional member for the household size.

It's a touchy area when the relationship consists of cohabitation of individuals that are not married. It is arguable both ways. I have seen it listed both ways. I like the offset way better.

It will vary by District and possibly Trustee on how they want to treat certain living arrangements. I have read cases where the Judge wouldn't allow the debtor to claim a girlfriend and her kids on B22C, but in the famous In Re Jewell case, another judge ruled the opposite way!

[rhp]

Here in MD, for my "Sig Other" I had to report his contributions in the 6 months back. He lost his job in June, and I filed in October. His contributions for April though June were included, and from July to September, 100% of the expenses were mine, so showing the big drop of his contributions, I show about $400 monthly shortfall, and that's how it stands at this time. (Boy, do we play with Peter and Paul and everyone in between. What fun!)

You've got me wondering now how expenses would be handled if I was in your shoes. I will see him tomorrow for my car reaffirm hearing. If I get a chance, I'll ask him.

Thanks, that would be awesome!

[rhp]

It might, but it's not income unless they pay it to you. What it is, however, is an offset to your expenses, so you reduce the expenses by the amount. There are arguments, still, over whether you would, if over the median, use the UST's expense numbers on Form B22A (B22C) or not. However, you would always have "actual" numbers on Schedule J.

I will add that some attorneys and Trustees see this differently and count the "room mate's" income in the income calculation. The key is, if they require you to include the income on Line 8 of Form B22A, then you get to claim the additional member for the household size.

It's a touchy area when the relationship consists of cohabitation of individuals that are not married. It is arguable both ways. I have seen it listed both ways. I like the offset way better.

It will vary by District and possibly Trustee on how they want to treat certain living arrangements. I have read cases where the Judge wouldn't allow the debtor to claim a girlfriend and her kids on B22C, but in the famous In Re Jewell case, another judge ruled the opposite way!

Thanks, JB. To be sure I understand this "offset" method, how would my rent be listed? The total rent for the apartment is $700. So, on Schedule J I'd list my expense as $350?

BTW, I am well under the median income, whether I use her contribution to the household in the calculation, or not. My income averaged over the last 6 mos is only $250/mo. And the total of our monthly living expenses is $1400.

[justbroke]

Thanks, JB. To be sure I understand this "offset" method, how would my rent be listed? The total rent for the apartment is $700. So, on Schedule J I'd list my expense as $350?

Exactly, because that is your actual rent expense. Similarly, if you do the same for utilities, that offset would be used.

BTW, I am well under the median income, whether I use her contribution to the household in the calculation, or not. My income averaged over the last 6 mos is only $250/mo. And the total of our monthly living expenses is $1400.

Ouch. Sorry to read that. You should be fine. I think the only issue comes when you're over-the-median and the division of expenses become "interesting" to the United States Trustee (UST).

[oregonpilot]

Ouch. Sorry to read that. You should be fine. I think the only issue comes when you're over-the-median and the division of expenses become "interesting" to the United States Trustee (UST).[/QUOTE]

ahhh JB....must have been why mine was never questioned. I sure didn't have anything interesting. BF's income was mostly SS. When i did have his income in the "pot" at the start of the whole process...we were under the median by 25k.

[rhp]

Exactly, because that is your actual rent expense. Similarly, if you do the same for utilities, that offset would be used.

Ouch. Sorry to read that. You should be fine. I think the only issue comes when you're over-the-median and the division of expenses become "interesting" to the United States Trustee (UST).

Yeah, I'm a little broke at the moment. The only issue might be if they called her entire income into question. That would put us slightly over the median, but it doesn't sound like that happens with unmarried couples (or roommates).

[BrokeinMD]

Rhp, I'm sorry. My attorney had other clients at the hearing, too, so I didn't get a chance to talk to him, as my time with him was split. I'll post about the car re-affirm in a separate post.

My attorney told me at consult I could include my Sig Other in under filing as a Household. Sig Other backed out of officially putting his name on the docs, being afraid of having bks on both our records, (which was a foolish fear, because he now has tool debt, and other expenses that have trashed his credit anyway). Since my expenses were partially paid with his money, I disclosed where it came from, as I was putting $2,000 grand a month of his money towards my unsecured debt. (I suddenly have the urge to kick myself in the pants for my own stupidity.)

My question to my attorney, if I had the chance to ask him would be, do you still disclose the other person's income, when you have none of your own? I would think he probably would have told me better to disclose the source rather than leave it out, as putting 0 when somebody is obviously paying for you to exist might draw attention, JMO.

Is there the possibility that your girlfriend/roomie might want to join you in this BK, if it's allowable where you are because she's supporting you?

You may be as broke, or broker than me, but there are plenty of BK Lawyers that give free consults. Go and get one to answer your questions, and make sure you let us know what happens!

[rhp]

Rhp, I'm sorry. My attorney had other clients at the hearing, too, so I didn't get a chance to talk to him, as my time with him was split. I'll post about the car re-affirm in a separate post.

My attorney told me at consult I could include my Sig Other in under filing as a Household. Sig Other backed out of officially putting his name on the docs, being afraid of having bks on both our records, (which was a foolish fear, because he now has tool debt, and other expenses that have trashed his credit anyway). Since my expenses were partially paid with his money, I disclosed where it came from, as I was putting $2,000 grand a month of his money towards my unsecured debt. (I suddenly have the urge to kick myself in the pants for my own stupidity.)

My question to my attorney, if I had the chance to ask him would be, do you still disclose the other person's income, when you have none of your own? I would think he probably would have told me better to disclose the source rather than leave it out, as putting 0 when somebody is obviously paying for you to exist might draw attention, JMO.

Is there the possibility that your girlfriend/roomie might want to join you in this BK, if it's allowable where you are because she's supporting you?

You may be as broke, or broker than me, but there are plenty of BK Lawyers that give free consults. Go and get one to answer your questions, and make sure you let us know what happens!

Oh, that's OK. Thanks for the thought though! Very nice of you, in the middle of your own suff like that.

I plan to do another consult or two when I have all my questions together. I went to one a few weeks ago, but missed alot of important stuff, being so green.

No, she doesn't have any of her own debt, so no need to file for her.

I will certainly post my findings.

[justbroke]

You cannot join two unmarried people into the same Bankruptcy case. Additionally, if you are paying $2,000 towards another person's unsecured debt per month, that means you have disposable income of $2,000/month and could fund either a $72K 36-month plan or a $120K 60-month plan.

I would consult with an attorney rather than speculate on the income issues, because there is a lot of caselaw around who counts as a "dependent" and who does not.

My attorney told me at consult I could include my Sig Other in under filing as a Household.

It is probably a misunderstanding. You could "count" them in your calculation of the number of people in the household. However, they would not be a party in the actual bankruptcy case. Hence, they would not have a bankruptcy on their record.

[BrokeinMD]

Just, my other half handed me 2K a month towards "bills" when he was working, which was two months out of the 6 months track back. We both used CC's that were in my name, so I put his contribution towards that, as all the CCs wanted $500 a month minimum payment. Our expenses were commingled, and still are, so I wouldn't call that "disposable" income. My recall of what my attorney told me at my consult in MD, may differ from your situation in Florida, and RhP's in Arizona, so yes, I concur, Rhp needs to check out his options in AZ where he lives.

[stratos]

I know there are cases in some jurisdictions that let you count a roommate in the household count for determining expenses, but I don't think that is a good legal position unless you are also including their income. To me, the better position would be that, if your incomes are not co-mingled, you maintain separate households even though you live at the same residence.

If you have an obligation to pay rent, but don't (like the poster here who is on the lease), then the amount the roommate is paying for your rent should probably be recorded as your income (regular contributions to household expenses). Additionally, if that person makes regular contributions to the debtor's portion of utilities, food, or other permitted expenses, those amounts should probably be recorded as income contributed by a third party. You would not need to record anything about the income earned by the third party.

This just seems like a reasonable legal argument, not a statement of the law. Also, I haven't recently reviewed opinions issued in any jurisdictions other than the 2009 Bostwick case. It's really a very fact-specific inquiry and should be an interesting issue for attorneys who really like practicing BK law.