Household income

[annikasaunt]

I know I've read this before, but can't remember the answer.

A friend of ours is considering filing. Has appt with my atty tomorrow. His mother lives with him and wife. She works part time and pays 1/3 of the rent. Does her income count towards anything when filing bk? She doesn't pay for anything else in the house, just her part of the rent on the apartment.

I told them about this forum and I know he lurks around, but I'm trying to help out as much as I can while I am waiting for my discharge! Should be any day now on my case...

Thanks all!

[FilingOnMyOwn]

It doesn't affect his income, it affects his expenses. If he only pays 2/3 of the rent, thats all he can claim as what he pays for rent.

[SinkingFast]

Actually, it'll affect the income side.

Even tho my Mom doesn't pay anything toward Household expenses, our attny is gonna add in her SSI income. Every penny. SSI isn't a problem because you add it up top and subtract it back out later on down on the Means Test. SSI is exempt income.

PLUS, the attny is gonna add in money from our Son. Son works to pay for his tuition, books, fees, and such for college. Does not contribute to the Household Expenses.

So your friend will have to add in the 1/3rd of the rent that Mom pays, on top of their income. Expenses for the filing couple will stay the same as long as the lease/mortgage, and utilities accts are in the couple's names.

[aa06a47]

I would look at what household size they will be claiming. If they want to claim mom as part of the "household size" to boost the size of the expenses on the means test, then they will need to use her income in the calculation. Otherwise, she is her own entity, she just pay's rent so to speak and she is not paying rent to you, but to the landlord.

[aa06a47]

Sinking, I think the only reason you are including your mom's income and son's income is because you are showing them as part of the household for the means test side of expenses.

[SinkingFast]

Sinking, I think the only reason you are including your mom's income and son's income is because you are showing them as part of the household for the means test side of expenses.

Actually it's the other way around, Aa. We're claiming them as members of the Household for income purposes. To get below the Median Income for our new State.

Of course, it would be hard for us to justify some of our expenses on Schedule I with a family of 4 as well. For example, our rent. We certainly wouldn't need as big a place and wouldn't pay as much rent as we do for a family of 4. Well, we could, but the Court would think we were spending frivolously and probably wouldn't allow what we do pay.

[SinkingFast]

Annika,............

How old is the Mom and does your friend currently include her on their taxes as a dependent?? If they do, they could probably claim her for BK purposes as well. Then friend's family of 2 would be a family of 3.

[aa06a47]

Actually it's the other way around, Aa. We're claiming them as members of the Household for income purposes. To get below the Median Income for our new State.

Of course, it would be hard for us to justify some of our expenses on Schedule I with a family of 4 as well. For example, our rent. We certainly wouldn't need as big a place and wouldn't pay as much rent as we do for a family of 4. Well, we could, but the Court would think we were spending frivolously and probably wouldn't allow what we do pay.

Yeah, the more members of the household you can include, the more income you can make and still be below the med and the more expenses you can subtract. Bigger households are better when it come to filing BK.

[annikasaunt]

They don't claim her as a dependent. They have 2 young kids themselves and mom works part time. They are well below the median income level. In Connecticut we have a very high level. Very easy to fall below it for your average folks!

Thanks for all your answers!