Pelley Law Office LLP
Dallas Office
Plano Office
Sherman Office
214-733-1775
972-608-0335
903-813-4778

No Charge For Initial Consultation ($250 value)

Menu Contact

Over 80 Years Of Combined Experience

View Our Practice Areas

Means Test and Household Size

In order to qualify for a Chapter 7 bankruptcy or to determine how much of unsecured debt must be paid back at zero percent interest through a Chapter 13 bankruptcy, a debtor must pass a Means Test analysis.  The means test is Congress's 2005 legislation that compares what most families of the debtor's size in Texas gross pay is according to the IRS's guidelines compared to what the debtor's family's gross pay was in the six months prior to the month in which the bankruptcy is filed.  The second part of the two part test compares the debtor's local housing, utility and transportation expenses to what the IRS's guidelines indicate is normal for the area in which the debtor lives.

Courts have reached different conclusions on whether non-family members residing with the debtor may be counted as part of the household size in order to determine which Chapter the debtor was eligible to file.

In the In re Napier case, the court held that debtors may not include boarders as members of their household for purposes of the means test.  However, two years later in In re Smith, the Western District of Michigan court held that "household" as defined by Section 1325(b)(4)(H) means all persons, related or not, who reside in the same housing unit as does the debtor. 

The courts in Ohio and Minnesota in 2007 agreed with the Michigan court that the debtors could include all members of the household in the means test calculation.

No Comments

Leave a comment
Comment Information

Awards & Recognition

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Office Locations

Plano office
Sherman office
Dallas office

Plano Office
1312 14th Street, Suite 100
Plano, Texas 75074

Phone: 972-608-0335
Map & Directions

Sherman Office
905 North Travis Street
Sherman, Texas 75090

Phone: 903-813-4778
Map & Directions

Dallas Office
6060 North Central Expressway, Suite 602
Dallas, Texas 75206

Phone: 214-733-1775
Map & Directions