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Does an overseas housing allowance count as income on the means test if it has to be spent 100% on housing?

Raleigh, NC |

I am a federal employee overseas. I receive a substantial housing allowance (more than my base salary) but I have to provide receipts for rent, utilities to the U.S. govt to ensure that 100% of my housing allowance goes to housing expenses to ensure I don't "pocket" any housing allowance. It is not at all part of my disposable income and if I moved to a less expensive house my housing allowance would decrease accordingly. Essentially I receive free housing. However, counting my housing allowance on the means test and then using the standard deductions skews the results of my means test making it appear that I have several thousand dollars of disposable income that I do not have and doesn't reflect my financial reality. Is there a way to overcome this obstacle to file a Ch 7?

Attorney Answers 3


  1. Yes, it is income.

    You have a complex case, you need to hire an attorney. A good attorney can make your case work.


  2. Yes, it is income. Hire a lawyer that can assist you with this process. Bankruptcy law requires more specifics than what you can tell us in a paragraph here. You need to go see a bankruptcy attorney !


  3. Congress didn't consider all kinds of eventualities when they enacted the changes to bankruptcy laws in 2005 & plenty of attorneys have complained about it without much success. Yes, the law says you have to include income from all sources, except social security & all sources means everything. With enough experience under their belts, bankruptcy attorneys are able to get you past the means test using the rules, and if the rules don't work, the right attorney may be able to persuade the court to allow an exception to the rules. Hope this perspective helps!

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