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The Nonfiling Spouse and the Means Test?s Marital Adjustment

By L. Jed Berliner, Springfield & Marlborough, MA Ban

The shocking realization is that your spouse might have to contribute to your Means Test-required payments even if you file alone.   You aren’t happy about this at all.  ”But they’re my debts.  Why should my husband or wife have to contribute?”  Because that’s the law.  Your income includes all regular contributions to the household expenses of yourself and your dependents, including those from your marital partner.

The Marital Adjustment is how we get to deduct your spouse’s separate expenses from your income.  They must truly be separate, like accurate payroll withholdings.  But it’s not enough to say that the s/he has separate credit card charges.  For example, a charge for food, clothes, furniture, or even gasoline or car repairs could be a regular contribution to the household expenses of yourself or your dependents.

How about separate mortgage payments by your spouse for a home you live in but don’t own?  OUCH !!  Courts are giving us different decisions, even if in they are in the same state (although different districts).  Compare In re Trimarchi, 421 B.R. 914 (Bankr. N.D. Ill. 2010) (is part of the debtor’s income) with In re Clemons, 2009 Bankr. LEXIS 1959 (Bankr. C.D. Ill 2009) (deducted separate expense).

An angry husband or wife might simply refuse to cooperate, but you cannot file your bankruptcy case without the that income and expense information.  The information must be accurate, of course, because the Means Test form is signed under penalties of perjury.  Documents must be provided or there’s no Marital Adjustment deduction.  See In re Dugan, 2008 Bankr. LEXIS 2813 (Bankr. D. Kan. 2008). 

Are you ready to subpoena your angry partner?  I hope that your spouse, instead, will see the benefit to your entire family of you getting out of debt.

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Full post as published by Credit Law Network on March 27, 2011 (boomark / email).