Beaverton Bankruptcy: The Chapter 7 Means Test

Heads on a Bed:  How do we calculate our household size for the chapter 7 means test
The means test is one of the largest changes in the bankruptcy reform package that was passed back in 2005.  It imposes an income threshold to file non-business related Chapter 7 bankruptcy petitions.  This test takes the number of people in a household and assigns a gross income limit on their ability to file a Chapter 7. Here in Oregon for a single person you are looking at around 44,000/year gross. 
But before you get into calculating the gross income figures or the other deductions you are allowed to make for taxes, food, insurances, etc; you need to determine how many people are in your 'household'.  As a bankruptcy attorney I'm amazed that Congress didn't formalize this definition in the bankruptcy reform.  Since they didn't, its a pretty large grey area.  The way I look at it in my bankruptcy practice is the 'heads on a bed' approach. Basically anyone living in the house and sleeping there count as a family member. So this is not only spouses and children but would include grandparents, roommates, non married cohabitants, etc.  Basically the broadest definition you could come to. 
In many cases the proper counting of all household members will mean the difference between being able to file a Chapter 7 or being forced into a Chapter 13.  Any with most area's of bankruptcy law, there are many fine nuances to this and the means test is a very complex calculation and the household size is one small part.  Be sure to seek the guidance of a trained bankruptcy lawyer if you have any questions.
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