Will my girlfriends income be counted in my means test?

[dgifta]

I'm about to file for BK.

My girlfriend is considering moving in with me.
I understand what she pays towards the monthly expenses will be included as
income on my means test.

However, I believe I read that her monthly income of $3500 a month
will also be added.

Is that accurate?

Thank you
Dennis

[dman]

Is she already contributing? What does your means test look like now, vs if you were to add her to the household (bumping up the household count by 1, and also including her income?)? If you "pass" the means test now, without her, I would recommend filing now.

[sunshinepa]

I agree with dman, it's added income. I would file before she moves in, probably unitl discharge. You will be asked if any income changes are expected. If you are way below the median income, you may be ok with both however 3500 a month is substantial income.

[dgifta]

the means test looks good.
My income is only $2300 a month. She will be paying $500 a month. I'm not concerned about that.
What I'm concerned about is that there have been various court ruling on what constitutes a "household".

Apparently sometimes the US Census definition of a household is" Heads on the pillow". Meaning every person
is counted.

Sometimes the IRS definition is used, in which dependents are counted.
In addition, there is a qualification regarding whether funds are commingled.

It's her monthly salary of $3500 that concerned me. Whether that would be considered as if she were a spouse, even
though she's not, just because we're going to be cohabiting.

I spoke to my attorney who I just retained, and he said it's not an issue. I will of course report as
income what she contributes ro the household expenses, but I don't need to worry about her monthly salary.

Thank you!
Dennis

[dman]

IF she is living with you, and is part of your household (yes, that may or may not be iffy), then the ENTIRE $3,500 income she makes will be included.

Now, I'm no lawyer (I should probably put that in my signature), but I believe that if someone is giving you money to help with expenses, it qualifies as a gift (and if it's a loan...then they're a creditor...that's a whole other can of worms). Since you apparently pass the means test right now...I would strongly advise against changing your circumstances. File now.

So, what is she contributing RIGHT NOW? And HOW is she contributing it? Is she simply paying for some of the bills (i.e., she's paying for her cellphone bill and you're using the second line) or is she just giving you cash? If she's giving you cash to pay some of your bills (say, to help go toward the credit card bills), I'd simply disclose all the gifts she gave you as that, gifts (one-time deals). Stop paying those credit card bills. File bankruptcy. There wouldn't (shouldn't) be an issue about whether she counts as part of the household (and if she's not part of your household, her income won't matter). Wait about three months (approximately one month to the 341, another 60 days to discharge) and then move in together.

Just my suggestion.

[justbroke]

This is how it works. Since she is not your spouse, and you are not common-law married, then her income counts only insofar as it offsets your expenses! For example; if she made $50K a year and you made $40K a year... your bankruptcy would only list your income as $40K/year. Now, if she gives you regular contributions, then you'd list that on Schedule I as other income sources and state the reason. Otherwise, if she pays half the rent, and the rent is $1,200 a month, then YOUR expense for rent, on Form J, is $600/month.

That's how I like to think of it!

As for census definition, the courts pretty much agree that it's the census definition. However, that only determines the "household size" for purposes of the calculation of Median Income on the Means Test. It does not work for anything else unless you have a "natural" or "legal" responsibility to provide for those persons. In other words, through blood or marriage! If you're not married, you have no "legal" obligation to support the person and the court will not substitute your personal lifestyle choice over that of unsecured creditors. (A judge actually wrote that, but preceded it with "however cruel". It was a case where a man was supporting his girlfriend and her children.)

So, you can use household size (census definition) for calculation of median income, but it doesn't save you on the actual expense test!

[sunshinepa]

Well, your attorney should know the what he's talking about and how the trusee will look at it.

I would still be very nervouse about that income and wait until it's over, but that is me. If you trust your attorney, then go with it and don't worry.

[sunshinepa]

Ah, Justbroke enlightned us all. Thank JB!

[dman]

Better put than I could. I thought that's how it MIGHT be handled, but of course I wasn't positive, and I couldn't put it as well as you did. Still, I think that if he definitely qualifies now...why muddy the waters?

I know, I know...I used to be young and in love, and waiting three months might as well be an eternity.