Why Do I Have to Include My Spouse’s Income If They Are Not Filing Bankruptcy?

Filing bankruptcy is not as simple as it once was.  You have to meet certain qualifications to determine which bankruptcy you may file.  This is normally done by what is referred to as the Means Test.  The Means Test will determine how your household income compares to the State median income and whether or not you can afford to pay some of your debts back or can qualify for them to be wiped out.

The Means Test is based on the household income.  Household includes anyone living in the home who receives income of some sort, which would include your spouse.  Regardless of whether or not they file the bankruptcy with you, the court looks at the combined household income for purposes of the Means Test.  The bankruptcy court basically enacted this law to make sure that you cannot take advantage of creditors by one spouse filing a Chapter 7 bankruptcy to wipe out all of their unsecured debt while the other spouse is making $150,000 a year. Therefore, the household income is used for purposes of the Means Test.

One part of the Means Test deals with your income but another takes into consideration your expenses each month.  Any secured payments, taxes, health insurance, and other “qualified” deductions would be reflected.  If you are in the situation where you may be filing bankruptcy but your spouse is not, then this is where you would reflect any of the deductions that your spouse has as well.  This gives you the opportunity to show the court that while all of your income may be combined, your spouse still has their own debts.  Maybe there are small amounts of credit card payments that are only in your spouse’s name and they want to continue to pay those or a vehicle that is solely in their name only they are obligated to pay.

Unfortunately, the saying, “What’s mine, is yours” goes a long way and the court understands that income and expenses for a household are combined. The court is simply making sure that you cannot “get over” the system.  Including your spouse’s income and expenses in the Means Test is the best way to ensure that a person or couple filing bankruptcy is doing it in the fairest way possible.  We understand this question is, often times, asked because you are worried about your spouse’s credit. Including your spouse’s income in the bankruptcy will not have a negative impact on their credit.