Trustee Blog

Bankruptcy Education: Using Non-Filing Spouse’s Income

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Robert Whitmore Riverside Chapter 7 Trustee always asks married debtors who file individually if they have included the income of their spouse. While a married debtor may file individually, they Must use the non-filing spouse’s income.

707(b)(7)

No judge, United States trustee (or bankruptcy administrator, if any), trustee, or other party in interest may file a motion under paragraph (2) if the current monthly income of the debtor, including a veteran (as that term is defined in section 101 of title 38), and the debtor’s spouse combined, as of the date of the order for relief when multiplied by 12, is equal to or less than—

So this means that the US Trustee is allowed to use the non-filing spouse’s income. However in the next paragraph there are exceptions to using the non-filing spouse’s income:

(B) In a case that is not a joint case, current monthly income of the debtor’s spouse shall not be considered for purposes of subparagraph (A) if—

(i)

(I) the debtor and the debtor’s spouse are separated under applicable nonbankruptcy law; or

(II) the debtor and the debtor’s spouse are living separate and apart, other than for the purpose of evading subparagraph (A); and

(ii) the debtor files a statement under penalty of perjury—

(I) specifying that the debtor meets the requirement of subclause (I) or (II) of clause (i); and

disclosing the aggregate, or best estimate of the aggregate, amount of any cash or money payments received from the debtor’s spouse attributed to the debtor’s current monthly income.

So a non-filing spouse’s income must be used unless an exception applies.

The bankruptcy marketing opportunity is to learn the rules of the bankruptcy code to know when you can qualify a married person filing separately and when you cannot. This will save you time and aggravation by not having to defend a US Trustee motion to dismiss for abusive filing.

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