Chapter 7 & Spouse Income

Letter to “Ask Leon”

I am in Michigan and am looking at filing Chapter 7. I would have a hard time passing the means test if my wife’s income is included. The mortgages are in my name. My vehicle is in my name and the delinquent debts and aJ are in my name only. My wife has a vehicle in her name and other bills in her name only. Do I have to use my wife’s income when figuring out the means test?

Leon Says…

The law is so new that we just don’t have definitive court rulings on this yet. However, the “means test” is just one of several obstacles. I believe your wife’s income will be included in the “means test” at least to the extent of the amount of her income that is shared with you to pay for common expenses, and the amount that she validly excludes from sharing with you probably won’t be counted. However, the court may still dismiss a case that passes the means test IF the court concludes that your case was filed in “bad faith” or if the “totality of your financial circumstances” demonstrates abuse. As always, please see an attorney bankruptcy specialist before you go any further with this.