Household Size: When is a family of 3 not a family of 3?
The issue of household size can be tricky in cases of shared custody, children who live at college part of the year, or non-custodial children living in the household.
There will undoubtedly be litigation on this subject. The official form seems to suggest that the issue is whether the person is part of the household and is a dependent. (That is, you can't include a roommate who is not your dependent in your household size, yet you may have to include the portion of their income that contributes to the overall income of the household. See the help topic on that subject. This can be an issue for same-sex couples who cannot legally marry.)
In April 2010, the United States Trustee's office issued a PDF of their official position on legal issues surrounding each line of the Chapter 7 means test form 22A. Keep in mind that the Trustee tends to protect creditor interests, so a debtor's bankruptcy attorney may not agree with every one of these positions. That said, if you can easily pass the means test under the trustee's relatively stingy interpretation of the rules, all the better.
The U.S. Trustee's Office's official statement (released April 2010) on how to fill out form 22A takes the the following position on how to fill out the means test:
OLD FORM Line 14, (New form 22A-1, Line 13) Applicable median family income.
- "Applicable state" is state of residence at filing.
- If married and two different households, residence is where most family members reside.
- If no plurality of family members are in any one state, use state of spouse with highest income.
- "Household size" is the debtor, debtor's spouse, and any dependents that the debtor could claim under IRS dependency tests. The USTP uses the same IRS test for the definition of both"household" and "family." IRS Publication 501 explains the IRS tests for "dependent."
- The USTP departs from the IRS dependent test (as does the IRS when it determines family size for collection purposes) in cases justifying "reasonable exceptions" (e.g. a long standing economic unit of unmarried individuals and their children). However, if an individual is counted as a family member for median income purposes, that individual's income should be included as income on Part II of Form 22A .
OLD Form Line 8 (New Form 22A-1 Line 4) of the means test:
- Includes payments made monthly, quarterly, or annually.
- Includes payments regardless of written agreement with contributor.
- Includes payments from roommate, partner, parent, or relative, regardless of whether living with debtor.
- Includes payments made directly to creditors on behalf of debtor, e.g., rent, car, or insurance.
- Does not include payments from non-filing spouse (which are already included as income in Column B).