One of the most complicated issues when filing an individual bankruptcy is how to handle the situation where the debtor is married, but their petition is individual rather than joint, that is, the spouse does not join the bankruptcy filing. Of particular importance in this scenario is how to correctly account for the debtor’s income and expenses in the calculation form B22A (‘Means Test’). In general, there are 3 possible scenarios when the prospective taxpayer is married:

‘Married Filing Jointly’: This is the most common, and conceptually the easiest to handle. Since both spouses participate in the bankruptcy, they are considered one economic unit, so both incomes will be included on Form B22A (‘Means Test’). Also, your combined expenses should be reflected on Schedule J (statement of) Current Expenses (i.e. itemized list of monthly living expenses such as food, clothing, housing, utilities, taxes, transportation, medications, etc.) .

‘Married, Not Filing Jointly, Not Filing Separate Households’ – This situation is a bit less common and therefore a bit more complicated. The debtor files without the participation of his spouse, who nevertheless resides with the debtor. Because of this fact, the non-filing spouse’s gross income must be included with that of the debtor for purposes of calculating the means test (Similarly, the non-filing spouse’s expenses must be listed on Schedule J of the debtor, which allows a fairer assessment of the financial situation of the debtor’s household). This means that the debtor may violate the means test even if his or her income is well below the applicable means test income limit if the non-filing spouse’s income, when added to the debtor’s, equals result in a total greater than the applicable limit. Equally frustrating for a potential debtor is when your income may be hopelessly insufficient to cover the debts in your name but, when the non-filing spouse’s income is taken into account, the combined income is adequate to cover the combined household. bills. This situation will trigger a 707(b) trustee’s objection just as surely as would a combined gross income that exceeds the applicable means test threshold figure.

‘Married, Not Filing Jointly, Filing Separate Households’: By checking this box, the debtor is literally stating, under penalty of perjury, that “My spouse and I are legally separated under applicable law other than bankruptcy or my My spouse and I are living apart for a purpose other than to evade the requirements of § 707(b)(2)(A) of the Bankruptcy Code.” This means that the debtor must be prepared to testify under oath, and also to document the fact, if requested, that the non-filing spouse’s income is not actually available to contribute to the debtor’s expenses, and that the debtor is not merely purporting to separate in order to exclude the spouse’s income from the means test calculation. The debtor’s petition must not include the non-filing spouse’s income (spousal, child, or other support payments, if received by the debtor from the non-filing spouse, are listed by the debtor as an item separate income) or expenses, which by virtue of the debtor’s statement are presumed applicable to a totally separate household.

Of course, be sure to seek the advice of an experienced bankruptcy attorney before deciding on a course of action on this or any other bankruptcy matter.