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In Chapter 7 can a non-debtor's income be used to pay for debts of the unemployed person filing if income is high for means test

Brooklyn, NY |

Due to prolong period of unemployment I'm living with my dad. Unfortunately I don't have any income and live rent free. My dad is receiving social security and pension but he also has an investment income that I'm not sure about. If I file for Ch 7 bankruptcy can he be forced to pay my debts because I'm residing with him and his income is pretty high for means test. Are there any adjustment for non-spouse family member in means test. Thanks

Attorney Answers 7

  1. The fact that you are an adult living with a family member does not automatically mean you are treated as a single "household" for the means test. A more accurate description is likely to treat you as a tenant (albeit a non-paying one). This is not an unusual situation. Meet with a couple lawyers and explain it. They will know what to do.

  2. Your father cannot be forced to pay your debts and I would not include his income or even consider him as part of your household as your are really living gratis in his household.

  3. I agree with the guys on this one - you are a household of one and the only income you need to disclose on the Means test is yours - $0. By the same token, you should only list living expenses you actually pay. It might be a good idea to note in the explanation section of Schedule J that your family provides for your living expenses. Hope this perspective helps!

  4. I agree that your father cannot be forced to pay your debts. I also agree that you have a household of one, however, I think that you should include as income to you the reasonable value of the support your family provides and if they actually pay any of your bills, then whatever they pay. You will almost certainly still qualify for a Ch7 under the means test even if you include these figures. I strongly recommend you consult with and retain an attorney to assist you.

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  5. No, he cannot be forced to pay your debts- ie there is no imputed liability merely for living in his house. Does your father contribute towards your monthly living expenses (ie food, transportation, clothes etc)? if so, i would include ONLY the amount of his support on schedule I, as well as the means test. I would certainly not include his total gross income under the household.

  6. When the bankruptcy laws were changed in 2005 to include the Means Test with Household Income a definition of household income wasn't made. Over the past 7 years it has been generally accepted that people in your situation are a family of 1, accordingly you will pass the Means Test. Now, with that said, there are certain bankruptcy trustee's here in the Brooklyn Bankruptcy Court that may take the position that you are a family of 2. I recommend that you retain the services of an experienced bankruptcy attorney in Brooklyn that is familiar with all of the bankruptcy trustees. You may contact us for a free consultation.

  7. I would agree with most of what the previous attorneys have stated. I would say for a ch. 7 bankruptcy you are a family of one for the means test and I would include your father's actual support that he has given you, as your income. You should have no problem passing the means test if he has only given you free housing, utilities and maybe some food. You probably want to speak with a local, experienced attorney who offers free, no obligation consultations and go over the specifics of your case. You may also want to contact the Brooklyn bar association as they may be able to put you in touch with an attorney who could file your case pro bono. I know Suffolk County, New York (where I practice) has the Nassau/Suffolk law services program and there are numerous attorneys that participate and will file the case pro bono.

    This answer is to be considered general advice and may not be the actual law in your jurisdiction. It also does not constitute an attorney-client relationship or privilege.

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