Bankruptcy Means Test: How Many People Are In My Home?
When filing for Bankruptcy, you have to file the Means Test with the Court. This is a document that determines whether you qualify for a Chapter 7 Bankruptcy, or if you are filing a Chapter 13 Bankruptcy, whether you are in a 3 year or 5 year commitment.
For the Means Test, there is a chart that lists household sizes, and a corresponding dollar amount. And if your calculated annual income is under that dollar amount, you pass the means test. So the question becomes, “How many people are in my home?” This question is most common in situations where someone has joint custody of children, or when they are perhaps in college. Also, what if they are over 18 years old, or you have never claimed them on your taxes?
The Court takes a “heads on beds” approach. This means they follow the Census Bureau definition of household, which is “all the people who occupy a housing unit as their usual place of residence.” Since Congress never established an exact definition to help determine whether an individual qualifies, the real question becomes whether or not that individual relies on you for the majority of their support. So if you are talking about a college roommate, you will not be able to count them as a part of your household, for bankruptcy qualification purposes.
The law can be unclear, and nearly muddy at times. Do you have a question on whether someone should count as a household member? Reach out to us today at 616-920-0555, or use the Get Started Today contact form below.