Source: https://lundinonchapter13.com/Content/Section/94.3
Timestamp: 2019-08-23 08:40:56
Document Index: 696844567

Matched Legal Cases: ['§ 94', '§ 94', '§ 707', '§ 101', '§ 707', '§ 1325', '§ 101', '§ 101', '§ 101', '§ 101', '§ 101', '§ 101', '§ 101', '§ 707', '§ 1325', '§ 1325', '§ 707', '§ 707', '§ 707', '§ 101', '§ 707', '§ 1325', '§ 707', '§ 707', '§ 707', '§ 707', '§ 101', '§ 707', '§ 102', '§ 707', '§ 101', '§ 101', '§ 1325', '§ 707', '§ 707', '§ 707', '§ 478', '§ 95', '§ 707', '§ 486', '§ 97', '§ 707', '§ 485', '§ 96', '§ 707', '§ 479', '§ 95', '§ 95', '§ 302', '§ 7', '§ 10', '§ 1306', '§ 46', '§ 46', '§ 101', '§ 379', '§ 36', '§ 92', '§ 101', '§ 379', '§ 36', '§ 92', '§ 1325', '§ 466', '§ 92', '§ 470', '§ 93', '§ 1325', '§ 471', '§ 94', '§ 102', '§ 707', '§ 481', '§ 95', '§ 707', '§ 707', '§ 483', '§ 95', '§ 707', '§ 485', '§ 96', '§ 379', '§ 36', '§ 36', '§ 36', '§ 379', '§ 36', '§ 379', '§ 36', '§ 380', '§ 36', '§ 101', '§ 379', '§ 36', '§ 92', '§ 1325', '§ 493', '§ 100', '§ 493', '§ 100', '§ 379', '§ 36', '§ 101', '§ 101', '§ 101', '§ 707', '§ 101', '§ 101', '§ 707', '§ 101', '§ 707', '§ 101', '§ 101', '§ 1325', '§ 1325', '§ 1325', '§ 1325', '§ 1325', '§ 1325', '§ 1325', '§ 1325', '§ 101', '§ 1325', '§ 101', '§ 407', '§ 1325', '§ 407', '§ 101', '§ 101', '§ 1325', '§ 101', '§ 101', '§ 1325', '§ 101', '§ 1325', '§ 101', '§ 1325', '§ 1325', '§ 1325', '§ 1325', '§ 101', '§ 1325', '§ 1325', '§ 101', '§ 707', '§ 101', '§ 101', '§ 1325', '§ 1325', '§ 101', '§ 1325', '§ 101', '§ 1325', '§ 707', '§ 101', '§ 101', '§ 707', '§ 101']

§ 94.3 Accounting for Spouses
Cite as: Keith M. Lundin, Lundin On Chapter 13, § 94.3, at ¶ ____, LundinOnChapter13.com (last visited __________).
For no obvious good reason, BAPCPA has complicated the treatment of a spouse’s income and expenses in Chapter 13 cases. The problem is present for all married Chapter 13 debtors but particularly acute when “amounts reasonably necessary to be expended—” are determined in accordance with § 707(b)(2)(A) and (B) for a debtor with CMI greater than applicable median family income.
The general statement of the problem is that in the definition of CMI in § 101(10A)1 and again in § 707(b)(2)(A) and (B), the drafters of BAPCPA seem to have misconceived of joint debtors as one “debtor” and one “debtor’s spouse,” rather than as two debtors. But this misconception appears inconsistently so that in some places spouses of debtors are treated the same as “debtors” for all purposes even when it is not a joint case;2 in other places spouses of debtors are left out entirely;3 in still other places, the debtor’s spouse counts only if the spouse is also a “dependent”;4 and in still other places, the debtor’s spouse is accounted for only if not also a dependent.5 This erratic treatment of spouses by BAPCPA means that accounting for the income and expenses of a spouse for purposes of the disposable income test in § 1325(b) and in other contexts is illogical and difficult and requires the exercise of much judgment.
Section 302 of the Bankruptcy Code was not amended by BAPCPA and is not ambiguous:
(b) After the commencement of a joint case, the court shall determine the extent, if any, to which the debtors’ estates shall be consolidated.6
In a joint case, there are two debtors, two bankruptcy estates and one bankruptcy case. The estates may or may not be consolidated.7
The definition of CMI in § 101(10A) is where the problems for married Chapter 13 debtors begin. In a Chapter 13 case, all of the debtor’s postpetition earnings start out as property of the Chapter 13 estate.8 In a joint Chapter 13 case, all of the earnings of each debtor are property of the respective Chapter 13 estate. Under new § 101(10A), the average monthly income from all sources that “the debtor receives (or in a joint case, the debtor and the debtor’s spouse receive)” is drawn into CMI.9 Under § 101(10A)(B), in a joint case, any amount paid by an entity other than the debtor or the debtor’s spouse on a regular basis for the household expenses of the debtor, the debtor’s dependents and the debtor’s spouse (if not otherwise a dependent) is also included in CMI.10
CMI cuts across estates and debtors to create a single “fund” that does not respect the separate incomes of the separate debtors. Section 101(10A)(A) includes all of the debtor’s and the debtor’s spouse’s income in CMI for a joint case. Section 101(10A)(B) adds to that combined income amounts paid by others on a regular basis for the household expenses of the debtor, the dependents of the debtor or the spouse of the debtor—but only if the spouse is “not otherwise a dependent.”
What happened to the dependents of the debtor’s spouse in § 101(10A)(B)? CMI includes amounts paid by others on a regular basis for the household expenses of the debtor and the debtor’s dependents but does not include amounts regularly paid by others for the household expenses of a dependent of the debtor’s spouse who is not also a dependent of the debtor.
This imbalance points to the next question: who is the “debtor” and who is the “debtor’s spouse” for purposes of the CMI calculation in § 101(10A)? We never had to ask questions like that before BAPCPA because we had two debtors in a joint case and could talk about each with the same substantive content. With BAPCPA, it makes a difference to declare which individual in a joint case is the debtor and which is the debtor’s spouse.
Imagine a husband and wife who each have children from prior marriages. The wife’s ex-spouse pays $500 a month to a school for the tuition, room and board of their child and that child is not a dependent of the husband. If the wife is the debtor, there is a good argument that the $500 a month paid by the wife’s ex-husband is included in CMI by § 101(10A)(B) as an amount paid on a regular basis for the household expenses of a dependent of “the debtor.” But if the husband is the debtor and the wife is the “spouse of the debtor,” the $500 paid for the household expenses of a dependent of the debtor’s spouse is not captured by § 101(10A)(B). So, again, who is the debtor and who is the debtor’s spouse in a joint case? Nobody knows. The concept is foreign to bankruptcy practice before BAPCPA.
But the problems of accounting for spouses multiply when we consider § 707(b)(2)(A) and (B). Upon proper objection, a Chapter 13 debtor must pay all projected disposable income to unsecured creditors under § 1325(b)(1).11 If the debtor’s CMI is less than applicable median family income, “amounts reasonably necessary to be expended—” for purposes of calculating disposable income are determined by § 1325(b)(2)(A) and (B).12 If the debtor’s CMI is greater than applicable median family income, “amounts reasonably necessary to be expended—” are determined in accordance with § 707(b)(2)(A) and (B).13
Section 707(b)(2)(A) and (B) continue the schizophrenia with respect to debtors and debtors’ spouses. Under § 707(b)(2)(A)(ii)(I), the “debtor’s” monthly expenses shall be the amounts specified in the listed IRS Standards “for the debtor, the dependents of the debtor, and the spouse of the debtor in a joint case if the spouse is not otherwise a dependent.”14
The general rule of construction that “the singular includes the plural”15 does not contribute usefully in this situation. Pluralizing “debtor” doubles every monthly expense described in § 707(b)(2)(A)(ii) leading to even greater nonsense. Two debtors and two spouses is not what the words contemplate.
In a joint case only “the debtor” gets to reduce CMI by monthly expenses. In other words, only one monthly expense deduction is allowed for joint debtors. Of course, all of the debtor’s spouse’s income was included in CMI by § 101(10A); but after BAPCPA, spouses don’t get separate monthly expense deductions in a joint case.
If a husband and wife file separate Chapter 13 cases, each would be a “debtor.” If each spouse has CMI greater than applicable median family income, each would get monthly expenses calculated under the IRS Standards for each debtor and the dependents of that debtor. The point here is obvious: BAPCPA does not treat married debtors equally or the same when accounting for income or expenses when CMI exceeds applicable median family income.
Debtors’ attorneys have to do important extra work to determine which filing configuration is best for married debtors. Filing a joint case may be better for debtors when CMI for the joint debtors will be greater than applicable median family income and determining “amounts reasonably necessary to be expended—” in accordance with § 707(b)(2)(A) and (B) produces less disposable income than would be extracted by a Chapter 13 trustee applying § 1325(b)(2)(A) and (B) to one or both debtors in a separate case. If one debtor has separate CMI greater than applicable median family income and one does not, it is possible that filing a separate case for the one spouse with CMI greater than applicable median family income gives enough protection to the couple while producing the least projected disposable income. You cannot answer these questions without doing the math three ways—two separate cases and one joint.
These calculations get more convoluted as you dig deeper into the “amounts reasonably necessary to be expended—” allowed by § 707(b)(2)(A) and (B). The reasonable and necessary expenses for health insurance, disability insurance and health savings accounts described in § 707(b)(2)(A)(ii)(I) are allowed “for the debtor, the spouse of the debtor, or the dependents of the debtor”—without regard to whether the case is a joint case! In other words, even a married debtor not filing jointly enjoys the full deduction from CMI for health and disability insurance for the debtor, the dependents of the debtor and the spouse of the debtor. Also, married debtors filing separately would each be entitled to the full deduction. That’s what the statute says.
Keep going. The family violence expenses allowed by § 707(b)(2)(A)(ii)(I) extend to “the debtor and the family of the debtor” without regard to whether the case is a joint case. No mention of spouses here at all. “Family,” of course, is an expansive concept that would include the family violence expenses of a nonfiling spouse.
Then there is § 707(b)(2)(A)(ii)(II), which includes in monthly expenses the continuation of actual expenses “paid by the debtor” for the care and support of an elderly, chronically ill or disabled “household member” or member of “the debtor’s immediate family.”16 What happened to the debtor’s spouse? The debtor’s “immediate family” is defined to include “the spouse of the debtor in a joint case who is not a dependent.”17 But there is no mention of a deduction for expenses paid by a debtor’s spouse for the care or support of the spouse’s separate parents or children.
It is easy to imagine a debtor’s spouse who supports an elderly parent in a nursing home. That spouse’s parent falls outside the statutory definition of the “debtor’s immediate family.” But the income the debtor’s spouse uses to pay the nursing home expenses certainly is included in CMI in a joint case. What a deal: § 101(10A) captures all of the spouse’s income in a joint case, but § 707(b)(2)(A)(ii)(II) forgot about the spouse’s expenses for an elderly dependent of the spouse. Perhaps this spouse needs to be the debtor in this joint case.
Section 707(b)(2)(A)(ii)(IV) presents a twist on the same issue. Under this subclause, the debtor’s monthly expenses include the actual expenses “for each dependent child” for documented school expenses.18 Whose dependent child are we talking about here? The section says it is “the debtor’s.” What happens to education expenses of children who are dependents of the debtor’s spouse but not dependents of the debtor? Is this a place where § 102(7) would read “debtor’s” as “debtors’?”
Problems for spouses continue when BAPCPA tries to account for secured debts. Section 707(b)(2)(A)(iii)(II) includes in “the debtor’s average monthly payments on account of secured debts” an allowance for “additional payments . . . necessary for the debtor . . . to maintain the possession of . . . property necessary for the support of the debtor and the debtor’s dependents.”19 In joint cases, what happens to debts secured by property necessary for the support of a spouse who is not a dependent or for the support of a dependent of a spouse who is not also a dependent of the debtor? Once again, examples are plentiful, but the logic of this omission is not easily found.
Imagine a spouse who co-signed for the purchase of a car for that spouse’s child from a previous marriage. Or the spouse who pays the mortgage on a living place for that spouse’s parents. These payments would likely be included in the calculation of average monthly payments on account of secured debts if the payments were made by “the debtor” for the support of the debtor’s children or the debtor’s parents. But spouses in a joint case are not treated the same as debtors by the words in § 707(b)(2)(A)(iii).
Official Form B22C further convolutes the already unsteady treatment of spouses by BAPCPA. As detailed elsewhere,20 Official Form B22C undertakes the (impossible) task of presenting in a single form a Statement of Current Monthly Income,21 a calculation of commitment period22 and a calculation of disposable income.23 For purposes of the Statement of Current Monthly Income required by Interim Rule 1007(b)(6), CMI is defined by § 101(10A) to exclude the income of a debtor’s spouse except in a joint case—with an exception to the exception in § 101(10A)(B) for amounts regularly paid by an entity other than the debtor for the household expenses of a spouse who is a dependent of the debtor, when the case is not a joint case.24
In contrast, the commitment period calculation in § 1325(b)(4) requires comparison of “the current monthly income of the debtor and the debtor’s spouse combined” to applicable median family income without regard to whether the case is a joint case.25 This concept—CMI of the debtor and the debtor’s spouse combined—is obscure at best and for married debtors not filing jointly, it is internally inconsistent and impossible of certain calculation.26 But Part I of Official Form B22C requires all debtors—even married debtors not filing jointly—to schedule all of the income of the debtor and all of the income of the debtor’s spouse. A “marital adjustment” in Lines 13 and 19 is not sufficient to correct for the fundamental misdirection in Part I. The result is that Official Form B22C will not accurately generate a Statement of Current Monthly Income for many married debtors, whether filing jointly or not filing jointly.27
The “marital adjustment” in Lines 13 and 19 of Official Form B22C is worded in terms of “you or your dependents” and the amount of income in Line 10, Column “B”—the “spouse’s income” column—that should be deducted to arrive at CMI. The “you or your dependents” refers to the debtor’s dependents only. Once again, it could make quite a difference in the amount of the “marital adjustment” which spouse is the “debtor” and which is the “debtor’s spouse” because only amounts paid on a regular basis for the household expenses of the debtor’s dependents stay in CMI.
The spouse confusion continues through the expense deductions allowed to Chapter 13 debtors by Parts IV–VI of Official Form B22C when the debtor has CMI greater than applicable median family income. There is only one column in Parts IV–VI. The instructions repeatedly say “enter the amount you actually incur” or a similar phrase. Does “you” include the spouse of you? The instructions to Part I of Official Form B22C are certainly clear that the spouse’s income is included in Column “B.” Where are the instructions for claiming expenses actually incurred by the “debtor’s spouse” in each of the lines of Parts IV–VI? There are no such instructions, perhaps because the form drafters could not resolve the inconsistent treatment of debtor and spouse in clauses (ii), (iii) and (iv) of § 707(b)(2)(A).
This is an unsettling situation that is in marked contrast to the simplicity, consistency and efficiency that debtors need to negotiate Chapter 13 cases. To cover all the permutations of income and expenses for debtors and spouses and dependents of each or both, counsel may have to prepare and compare Forms B22C for married debtors filing separately, married debtors filing jointly and married debtors only one of whom is filing. Declaring who is the debtor and who is the spouse of the debtor will significantly change the calculation of CMI for some married debtors and will then affect the reductions in CMI allowed by § 707(b)(2)(A) and (B) to get to disposable income.
2 See, e.g., 11 U.S.C. § 707(b)(2)(A)(ii)(I) (“Such expenses shall include reasonably necessary health insurance, disability insurance, and health savings account expenses for the debtor, the spouse of the debtor or the dependents of the debtor.”), discussed in § 478.1 [ Health and Disability Insurance ] § 95.21 Health and Disability Insurance.
3 See 11 U.S.C. § 707(b)(2)(A)(iv), discussed in § 486.1 [ Total Priority Debts and Divide by 60 ] § 97.1 Total Priority Debts and Divide by 60.
4 See 11 U.S.C. § 707(b)(2)(A)(iii)(II), discussed below in this section and in § 485.1 [ Average Monthly Payments on Account of Secured Debts ] § 96.1 Average Monthly Payments on Account of Secured Debts.
5 See 11 U.S.C. § 707(b)(2)(A)(ii)(I) and (II), discussed below in this section and in §§ 479.1 [ Family Violence Expenses ] § 95.22 Family Violence Expenses and 481.1 [ Elderly, Ill or Disabled ] § 95.24 Elderly, Ill or Disabled.
6 11 U.S.C. § 302.
7 See § 7.1 [ Debtor Must Be an Individual ] § 10.1 Debtor Must Be an Individual; Spouses Allowed.
8 See 11 U.S.C. § 1306, discussed in § 46.1 [ Postpetition Earnings ] § 46.3 Postpetition Earnings.
9 11 U.S.C. § 101(10A), discussed in §§ 379.1 [ Form B22C: Statement of Current Monthly Income ] § 36.19 Form 122C-1: Statement of Current Monthly Income and 468.1 [ Current Monthly Income: The Baseline ] § 92.3 Current Monthly Income: The Baseline.
10 See 11 U.S.C. § 101(10A)(B), discussed in §§ 379.1 [ Form B22C: Statement of Current Monthly Income ] § 36.19 Form 122C-1: Statement of Current Monthly Income and 468.1 [ Current Monthly Income: The Baseline ] § 92.3 Current Monthly Income: The Baseline.
11 11 U.S.C. § 1325(b)(1), discussed in § 466.1 [ In General ] § 92.1 In General.
12 See § 470.1 [ Section 1325(b)(2)(A) and (B): “Amounts Reasonably Necessary to Be Expended—” When CMI Is Less Than Applicable Median Family Income ] § 93.1 Section 1325(b)(2)(A) and (B): “Amounts Reasonably Necessary to Be Expended—” When CMI Is Less Than Median Family Income.
13 See 11 U.S.C. § 1325(b)(3), discussed in § 471.1 [ Big Picture: Too Many Issues ] § 94.1 Big Picture: Too Many Issues.
15 11 U.S.C. § 102(7).
16 11 U.S.C. § 707(b)(2)(A)(ii)(II), discussed in § 481.1 [ Elderly, Ill or Disabled ] § 95.24 Elderly, Ill or Disabled.
17 11 U.S.C. § 707(b)(2)(A)(ii)(II).
18 See 11 U.S.C. § 707(b)(2)(A)(ii)(IV), discussed in § 483.1 [ Education Expenses ] § 95.26 Education Expenses.
19 11 U.S.C. § 707(b)(2)(A)(iii)(II) (emphasis added), discussed in § 485.1 [ Average Monthly Payments on Account of Secured Debts ] § 96.1 Average Monthly Payments on Account of Secured Debts.
20 See §§ 379.1 [ Form B22C: Statement of Current Monthly Income ] § 36.19 Form 122C-1: Statement of Current Monthly Income, 379.2 [ Form B22C: Commitment Period Calculation ] § 36.20 Form 122C-1: Commitment Period Calculation and 380.1 [ Form B22C: Disposable Income Calculation ] § 36.21 Form 122C-2: Disposable Income Calculation.
21 See § 379.1 [ Form B22C: Statement of Current Monthly Income ] § 36.19 Form 122C-1: Statement of Current Monthly Income.
22 See § 379.2 [ Form B22C: Commitment Period Calculation ] § 36.20 Form 122C-1: Commitment Period Calculation.
23 See § 380.1 [ Form B22C: Disposable Income Calculation ] § 36.21 Form 122C-2: Disposable Income Calculation.
24 11 U.S.C. § 101(10A), discussed in §§ 379.1 [ Form B22C: Statement of Current Monthly Income ] § 36.19 Form 122C-1: Statement of Current Monthly Income and 468.1 [ Current Monthly Income: The Baseline ] § 92.3 Current Monthly Income: The Baseline.
25 11 U.S.C. § 1325(b)(4) (emphasis added), discussed in § 493.1 [ Applicable Commitment Period Calculation ] § 100.1 Applicable Commitment Period Calculation.
26 See § 493.1 [ Applicable Commitment Period Calculation ] § 100.1 Applicable Commitment Period Calculation.
27 See § 379.1 [ Form B22C: Statement of Current Monthly Income ] § 36.19 Form 122C-1: Statement of Current Monthly Income.
Zahn v. Fink (In re Zahn), 391 B.R. 840 (B.A.P. 8th Cir. Aug. 14, 2008) (Kressel, Mahoney, McDonald) (IRA distribution to nonfiling spouse is not included in debtor's CMI because distribution was a one-time event that is not captured by definition in § 101(10A)(B). "[B]ecause the IRA was her husband's property, the debtor did not really receive the distribution from the IRA trustee at all. Her husband received it and used it to pay household expenses and pay debts. It is includible in income under that situation only if it is received 'on a regular basis' which these distributions were not.").
Ruskin v. Blackshear (In re Blackshear), 531 B.R. 711, 715-18 (E.D. Mich. May 20, 2015) (Duggan) (Although income and expense information for nonfiling spouse was not provided, Schedule I showed amount contributed each month by nonfiling spouse and nonfiling spouse's pay stubs were provided—enough information to determine that debtor satisfied projected disposable income test. "[T]o calculate the disposable income of a married debtor living with a non-filing spouse, a court must know whether the debtor's non-filing spouse regularly contributes to the debtor's household expenses and, if so, the amount of such contributions. Here, the Bankruptcy Court knew that Blackshear's husband contributed $600 per month to Blackshear's household expenses, as Blackshear disclosed this information on her Schedule I. . . . [P]ay stubs in connection with the husband's job as a bus driver . . . were furnished to the trustee . . . . The only pertinent information about the finances of Blackshear's husband that was unknown to the Bankruptcy Court was what the husband was doing with the portion of his monthly income . . . that he was not contributing to household expenses. . . . Although the Bankruptcy Court did not have a complete picture of the finances of Blackshear's husband, it had enough information about his financial situation to calculate Blackshear's disposable income and conclude that Blackshear was devoting all of that income to plan payments, that the plan was proposed in good faith, and that the plan is feasible.").
In re Campbell, No. 17-25246-LMI, 2019 WL 722759, at *2–*3 (Bankr. S.D. Fla. Feb. 19, 2019) (Isicoff) (That nonfiling spouse pays monthly ad valorem taxes for six parcels of vacant land does not increase debtor’s CMI because those taxes are not “household expenses” for purposes of § 101(14A). “[T]he income of the Debtor’s non-filing spouse is included in calculating the Debtor’s CMI to the extent her income is used on a regular basis for household expenses. . . . [T]he Court finds that ‘household expenses’ are those relating to expenses to maintain the home and feed, clothe and protect the family living in the home. . . . [I]f the Debtor’s non-filing spouse were to stop paying the ad valorem taxes, the nonpayment would not affect the Debtor’s daily household functioning since payment of those ad valorem taxes does not impact the health, safety, preservation of shelter, etc. of the Debtor or his dependents. Thus, the Court finds that the ad valorem taxes are not a household expense. . . . [T]he proper place to take the Deduction is on the marital adjustment line.”).
In re Moss, 591 B.R. 338, 340–42 (Bankr. N.D. Ill. Oct. 23, 2018) (Goldgar) (Bankruptcy court admits possibility that Chapter 13 debtor can exclude nonfiling spouse’s mortgage payment from CMI and deduct Local Standards Housing ownership allowance as an expense. Court declines to address two issues not raised by the trustee’s objection to disposable income calculation: whether debtor can exclude from CMI house payment by nonfiling spouse when debtor is not liable on mortgage; whether debtor can deduct Local Standards Housing ownership allowance as an expense when debtor is not liable on mortgage. Nonfiling spouse owned marital residence, was only obligor on note and made $1,715.35 monthly mortgage payment. Debtor listed mortgage payment by nonfiling spouse as a marital adjustment excluded from CMI. Debtor also deducted Local Standards Housing ownership expense of $1,539 on line 9. “When a married debtor’s non-debtor spouse pays the mortgage on the marital residence, courts have split on whether the debtor can deduct the payment from his CMI because it is not a ‘household expense[ ] of the debtor.’ . . . When a debtor has no mortgage payment, courts are split on whether the debtor can nevertheless deduct the Local Standard mortgage expense on line 9a. . . . [T]he legal principle on which [the trustee’s] position is premised – no ‘double dipping’ for above-median chapter 13 debtors – does not exist. . . . Whether a debtor can make the marital adjustment to CMI for a particular expense under section 101(10A), and whether he can claim certain expenses under section 707(b)(2), depends on the Code. It may well be that in some cases debtors can do both.”).
In re Gracia, No. 18-50061-rlj13, 2018 WL 3726157, at *3 (Bankr. N.D. Tex. Aug. 2, 2018) (Jones) (Hamilton v. Lanning, 560 U.S. 505, 130 S. Ct. 2464, 177 L. Ed. 2d 23 (June 7, 2010), supports the reduction of income shown by the debtor when almost-former spouse’s income will go down in a few months when he loses his graduate student stipend. “Gracia properly accounts for her husband’s impending loss of income. . . . Gracia’s husband’s income is appropriately deducted because the stipend is virtually certain to end[.]”).
In re Baker, No. 17-32061-KLP, 2017 WL 5197120, at *2–*8 (Bankr. E.D. Va. Nov. 8, 2017) (Phillips) (Marital adjustment at line 13 of Official Form 122C-1 includes mortgage payment when only nondebtor spouse is liable on mortgage—notwithstanding that debtor and debtor’s dependent live in the house. CMI does not include debt payments by nonfiling spouse and mortgage is not an “expense” of the debtor when only nonfiling spouse is liable to mortgagee. “The second component of CMI includes any amount ‘paid by any entity other than the debtor . . . on a regular basis for the household expenses of the debtor or the debtor’s dependents . . . .’ . . . Thus, a non-filing spouse’s income is included in CMI only to the extent it is paid for the household expenses of the debtor and the debtor’s dependents. . . . At least one court has pointed out that ‘expenses’ for purposes of § 101(10A)(B) does not include payments on debts because the language of § 707(b)(2)(A) specifically distinguishes ‘expenses’ from ‘payments on debts.’ . . . Debtor cannot ‘double dip’ by claiming both the marital adjustment and secured debt payment deductions because she has no secured debt obligation in connection with the Spouse’s mortgage debt. . . . The statutory language of § 101(10A) . . . supports the application of a debtor-centric approach in this case. To disallow the marital adjustment solely on the basis that the Debtor and her dependent receive an indirect benefit from the Spouse’s mortgage payments would lead to an artificially inflated monthly disposable income calculation and would deprive the Spouse of the income needed to make the mortgage payments that only he owes. . . . The Debtor is entitled to claim the marital adjustment for the Spouse’s mortgage payments on line 13 of Form 122C-1. The mortgage payments in this case are not an ‘expense’ of the Debtor or the Debtor’s dependent under § 101(10A)(B) because they represent ‘payments for debts’ as described in § 707(b)(2)(A)(ii)(I). Alternatively, . . . even if the mortgage payments are considered an ‘expense’ under § 101(10A)(B), they are not an ‘expense[ ] of the debtor or the debtor’s dependents.’”).
In re Hall, 559 B.R. 463, 469–71 (Bankr. S.D. Tex. Oct. 4, 2016) (Isgur) (When nonfiling spouse has separate car loan, proper accounting for debt is in marital deduction. Debtor cannot claim local standards transportation ownership deduction for nonfiling spouse’s car. Debtor incorrectly listed all of nonfiling spouse’s income as contributed to household expenses of debtor. Instead, debtor should have used marital deduction to reduce nonfiling spouse’s contribution but then cannot also deduct local standards ownership amount. Result is that plan cannot be confirmed because debtor’s disposable income goes up—local standard deduction that should not have been taken was greater than actual debt payment that should have been marital deduction. “The debt payments secured by vehicles that are titled in Hall’s non-filing spouse’s name are not household expenses. Accordingly, the amount of Hall’s non-filing spouse’s monthly principal and interest payments for the vehicles must be deducted as a marital adjustment, and may not be deducted as Hall’s vehicle ownership/secured debt expenses in the means test. . . . The marital adjustment only applies to income ‘that [is] not regularly paid for the household expenses of [the debtor or the debtor’s dependents].’ . . . Conversely, no marital adjustment may be taken for that portion of the non-filing spouse’s income that is regularly paid towards the household expenses of the debtor or the debtor’s dependents. . . . [Section] 707(b)(2)(A)(ii) is unequivocal that ‘monthly expenses of the debtor shall not include any payments for debts.’ . . . Instead, debts are addressed by § 707(b)(2)(A)(iii). . . . [F]uture payments on secured debts are a deduction in calculating projected disposable income; but they are a deduction that is distinct from the deduction of household expenses. . . . Put simply, payments toward debts are not expenses as contemplated by § 101(10A). Because the payments made on the debt secured by the vehicles titled in Hall’s non-filing spouse’s name are not expenses, they are not ‘household expenses’ to which he is contributing. . . . Because the vehicle expenses are not household expenses, the payments may be deducted under the marital adjustment. However, the payments may not be deducted as both a marital adjustment and as a vehicle ownership/secured debt payment deduction. . . . Hall is not entitled to invoke the vehicle ownership deduction and secured debt payment deduction in the means test because she makes no monthly payments on debt secured by vehicles she does not own.”).
In re Bridgeforth, 556 B.R. 121, 124 (Bankr. M.D. Pa. July 29, 2016) (Thomas) (Chapter 13 debtor with a nonfiling spouse who is employed and has separate income and expenses should account for household expenses consistent with section 5.15.1.4 of the Financial Analysis Handbook of the Internal Revenue Manual: “‘[g]enerally, when determining ability to pay, a taxpayer is only allowed the expenses he/she is required to pay.’”).
In re Haroldson, No. 14-26941 MER, 2016 WL 3034794, at *4 (Bankr. D. Colo. May 19, 2016) (Romero) (Debtor must account for all of nonfiling spouse's income and expenses on Schedules I and J and on Form 122C-1 notwithstanding that nonfiling spouse maintains a separate financial life. Debtor lived with nonfiling spouse in house owned by nonfiling spouse not subject to any mortgage. Debtor testified that financial lives were separate and that they did not combine income and expenses. "A debtor must provide information regarding a non-filing spouse's income and expenses on Schedules I and J and Form B 122C-1. . . . To obtain confirmation, the Debtor must file amended forms including Mrs. Haroldson's income and expenses, even though such information does not appear to affect the Debtor's own disposable income.").
In re Vinger, No. 15-12069-SBB, 2015 WL 6821277, at *2-*7 (Bankr. D. Colo. Nov. 4, 2015) (Brooks) (Debtor not entitled to marital adjustment for one-half of rent jointly owed with nonfiling spouse. "'Current monthly income' is defined by § 101(10A) of the Bankruptcy Code, and the 'marital adjustment' is the primary way that a debtor with a non-filing spouse adjusts her gross income to meet that definition. . . . [T]he determination of 'above' or 'below' median income occurs twice during the Chapter 13 plan process—first, to determine applicable commitment period under § 1325(b)(4), and second, to determine the analysis for calculating disposable income under § 1325(b)(2). The language in the Bankruptcy Code describing what income is to be included is not the same: § 1325(b)(4) refers to the 'current monthly income of the debtor and the debtor's spouse combined'; § 1325(b)(2) refers to the 'current monthly income received by the debtor.' . . . [T]he overwhelming majority of courts that have taken up the issue have found that the marital adjustment to be utilized for both analyses is identical. . . . By the Bankruptcy Code's own definition, 'a debtor's spouse has no current monthly income except in a joint case.' Therefore, in a married debtor's individual case, current monthly income applies only to income received by the debtor. . . . Put another way, § 1325(b)(4)(A)(ii) instructs married debtors to add '$0' for their spouse's current[ ] monthly income when they have filed alone. This analysis squares with the language in § 1325(b)(2). . . . ' . . . [T]he Court finds the more reasonable interpretation of § 1325(b)(4) is that Congress inadvertently failed to include the qualifier that the spouse's current monthly income must only be "combined" with the filing debtor in a joint case by putting those words in parenthesis (or elsewhere), as it did in the definition of current monthly income. . . . ' . . . [A] literal reading of § 1325(b)(4) would artificially inflate combined current[ ] monthly income beyond the total number of dollars actually brought in by the household because a large portion of a debtor's 'current monthly income' (as defined by § 101(10A)) already includes a portion of the non-filing spouse's income and vice versa. . . . [T]he Debtor's rent is a household expense. . . . [E]very aspect of the Debtor's and her husband's financial lives are intertwined . . . they are jointly and severally liable on their leased home. . . . [A] 50/50 division of the rent expense flies in the face of the definition of 'household expense.' . . . [I]t is an expense for which the Debtor is 100 percent liable for the full payment . . . . To attribute a portion of the rent as being 'his' and 'hers' ignores the legal realities of her lease obligation and makes no practical sense. . . . The entire rent obligation is a household expense belonging to her, regardless of how the Court approaches the issue. . . . [T]he Debtor is not entitled to a marital adjustment for her husband's portion of the rent payment.").
In re Ortiz-Feliciano, 532 B.R. 185, 195 (Bankr. D.P.R. June 15, 2015) (Lamoutte) (Evidentiary hearing necessary to determine whether debtor and nonfiling spouse function as "single economic unit"; outcome of that question will determine whether income and expenses of nonfiling spouse must be disclosed to calculate the debtor's projected disposable income. "Debtor . . . acknowledges that 'his wife is covering most [of his] living expenses'. . . , no evidence to that effect has been submitted or proffered. Absent of such evidence, this court cannot ascertain what 'most living expenses' actually constitute. Moreover, the court cannot 'accept as fact that a married couple will pool all income and expenses like a quasi-partnership or that a married couple will even share all household expenses, whatever that means, equally' . . . . [T]he court will schedule an evidentiary hearing to determine if in fact the Debtor and his non-filing spouse operate or not as a 'single economic unit'. If they do, then the non-filing spouse's income and expenses must be considered in the Debtor's Means Test.").
In re Rodgers, No. 14-41824-13, 2014 WL 4988388, at *1, *1-*3 (Bankr. W.D. Mo. Oct. 7, 2014) (Federman) (Schedules must reveal nonfiling spouse's income and expenses to determine what contribution nonfiling spouse makes to debtor's current monthly income—even when nonfiling spouse is not cooperative. Married debtor scheduled no income or expenses for spouse but testified that spouse "'chooses not to cooperate with the filing of the bankruptcy, including not turning over her paystubs or tax returns.'" "Debtor and his wife are more like 'roommates,' in the sense that they do not pool income and pay household expenses from the pool. They file separate tax returns and she maintains a separate bank account . . . . Debtor's counsel further conceded that, while the Debtor pays the lion's share of the household and child care expenses, the nonfiling spouse does contribute some funds to the running of the household. Nevertheless, she apparently wants no involvement whatsoever in the Debtor's bankruptcy case and refuses to cooperate in providing the Trustee with information about her financial circumstances. . . . '[D]isclosure of such information is mandatory. . . .' . . . [D]isclosure of a nonfiling spouse's income is not 'voluntary,' . . . . [Section] 1325(b) requires a Chapter 13 debtor to devote all 'current monthly income' to plan payments, and 'current monthly income' expressly includes 'any amount paid by any entity other than the debtor . . . on a regular basis for the household expenses of the debtor or the debtor's dependents.' . . . [T]he Debtor's schedules show nothing about what the nonfiling spouse contributes to the household . . . . [W]ithout knowing what she contributes to the household and childcare expenses, there is no way of knowing whether he is contributing all 'current monthly income' to the Plan. . . . [A] Plan proposing to pay less than 100% to unsecured creditors cannot be approved without disclosure of regular contributions to the household by a non-debtor. . . . [W]ithout the requested information as to her income and expenses, it is impossible to tell whether the Debtor is, in effect, subsidizing his wife's expenses at the expense of his unsecured creditors.").
In re Dye, 495 B.R. 699, 702-03 (Bankr. E.D. Va. Aug. 16, 2013) (Huennekens) (Extending Mort Ranta v. Gorman, 721 F.3d 241 (4th Cir. July 1, 2013) (Gregory, Agee, Faber), nonfiling spouse's Social Security income is excluded from projected disposable income. "The Bankruptcy Code's definition of 'current monthly income' 'excludes benefits received under the Social Security Act.' . . . The statutory exclusion is not limited solely to Social Security income received by the Debtor. Accordingly, the Social Security income received by a non-filing spouse should not be included in the calculation of current monthly income. . . . The Trustee maintains that the non-filing spouse should be required to use his Social Security income to pay for his half of the household expenses. . . . The Trustee's argument would circumvent the Fourth Circuit's ruling by considering Social Security income for the purposes of calculating allowable expenses. The result would be tantamount to including the Social Security income in the calculation of projected disposable income.").
In re Carlyle, No. 12-11923, 2013 WL 3777096, at *4 (Bankr. S.D. Ga. July 17, 2013) (Barrett) (Payments by nonfiling spouse on loan for truck owned separately by nonfiling spouse are not included in current monthly income for purposes of the applicable commitment period calculation under § 1325(b)(4). "He uses the truck for his personal errands and for transportation to work. He pays for the maintenance and insurance for the truck. These payments are made from his personal bank account, not a joint account. Debtor is not an owner of the truck nor is she on the loan documents. She uses the truck only on occasion. Given these facts, I find Debtor's non-debtor husband's payments on this truck are not items 'paid on a regular basis for the household expenses of [Debtor or her dependents].' . . . Debtor is allowed to deduct her non-debtor husband's truck payments on Lines 13 and 19.").
In re Braswell, No. 13-60564-fra13, 2013 WL 3270752, at *6 (Bankr. D. Or. June 27, 2013) (Alley) ("[T]he non-filing spouse's attributable tax refunds should not be required to be paid into the plan.").
In re Pennington, No. 12-80327-G3-13, 2013 WL 1176235, at *6 (Bankr. S.D. Tex. Mar. 21, 2013) (Paul) (For CMI purposes, marital deduction includes payments by nonfiling spouse for student loans to nonfiling spouse's separate children; payment of home equity loan by nonfiling spouse is included in the debtor's CMI because loan is secured by the debtor's homestead; credit card payments by nonfiling spouse may be debts for expenses of the debtor or of the debtors' children and if so, would be included in the debtor's CMI. "The key inquiry for determining the propriety of a marital adjustment on Line 19 is the extent to which a non-filing spouse's income is not regularly contributed or dedicated to the household expenses. If the non-filing spouse's income is not regularly contributed for household expenses, it should not be included in calculating a debtor's disposable income and should be 'deducted' from current monthly income as a marital adjustment.").
In re Scott, 488 B.R. 246, 255-56 (Bankr. M.D. Ga. Jan. 11, 2013) (Smith) (Nonfiling spouse's Social Security income is excluded from current monthly income and from projected disposable income calculation. "'The language of section 101(10A) states that "benefits received under the Social Security Act" are excluded from current monthly income. Section 101(10A) does not specify that those benefits must be payable to the debtor' . . . . [I]t would be anomalous to conclude that Ms. Scott's social security benefits would not be included if she had filed a joint case with her husband, but would be included if she did not file a joint case.").
In re Toxvard, 485 B.R. 423 (Bankr. D. Colo. Jan. 9, 2013) (Romero) (Debtor must complete "spouse" column on Schedules I and J even when individual files without spouse so that bankruptcy court can determine feasibility and good faith. Home mortgage paid by nonfiling spouse is excluded from CMI when debtor is not liable and has no ownership interest in home. 401(k) loan used to improve property owned solely by nonfiling spouse is excluded from CMI and from projected disposable income calculation. One-half of utilities is excluded when paid by nonfiling spouse. One-half of car payment paid by nonfiling spouse is included in CMI when debtor has ownership interest in car. Fifty percent of health insurance premium is included in CMI when debtor is an insured. One hundred percent of hay expense for debtor's horse is included in CMI when paid by nonfiling spouse.).
In re Hersh, No. 11-B-35800, 2012 WL 5387627 (Bankr. N.D. Ill. Nov. 2, 2012) (Barbosa) (Payments of debtor's household expenses by ex-spouse are included in CMI and projected disposable income. Debtor's only source of income was ex-spouse who regularly paid monthly mortgage payment and paid utilities on behalf of debtor. Mortgage payment and utilities were included in debtor's CMI notwithstanding evidence that ex-spouse's income began to decrease and contributions to spousal support decreased after the petition. Relevant calculation period for CMI is the six-month prepetition period.).
In re Mack, No. 12-10594-WHD, 2012 WL 6790194, at *3 (Bankr. N.D. Ga. Sept. 11, 2012) (Drake) ("Combined" CMI for applicable commitment period purposes is debtor's CMI with "marital adjustment" to exclude taxes paid by nonfiling spouse and 401(k) contributions by nonfiling spouse. "Assuming the Debtor includes an amount contributed by her spouse towards the calculation of her own CMI, a requirement to substitute in section 1325(b)(4) the non-filing spouse's CMI with 'full gross income' . . . runs the risk of a duplicate assessment of the non-filing spouse's regular contributions toward the household expenses of the Debtor or Debtor's dependents.").
In re Paliev, No. 11-17647-BFK, 2012 WL 3564031, at *7 (Bankr. E.D. Va. Aug. 17, 2012) (Kenney) (Debtor gets marital adjustment at Line 19 for taxes nonfiling spouse pays on separate income and for nonfiling spouse's gym membership but is not entitled to a marital deduction for 529 College Savings Plan deduction for the benefit of a dependent of the debtor. "[T]he Debtor is entitled to deduct her husband's payroll deductions in calculating her disposable income . . . . 529 College Savings Plan is an expense paid by the Debtor's husband for the benefit of the Debtor's daughter, who is a dependent of the Debtor. Thus, it must be considered a household expense for the benefit of a dependent, and cannot be deducted as a part of the marital adjustment.").
In re Cluff, No. 09-41244-JDP, 2012 WL 909551 (Bankr. D. Idaho Mar. 15, 2012) (Pappas) (Debtor had no individual income, but her future income included community property interest in nonfiling spouse's earnings. Under Ohio law, property acquired after marriage by either spouse, including wages or salary, was community property. Notwithstanding community property income, Schedule J expenses exceeded Schedule I income. Trustee's motion to modify confirmed plan denied.).
In re Duarte, No. 10-78606-reg, 2011 WL 2746186, at *5 (Bankr. E.D.N.Y. July 12, 2011) (Grossman) (Rejecting "50/50" rule, portion of joint income tax refund allocable to nonfiling spouse for purposes of disposable income calculation is determined by "separate filings rule." Adopting formula in Crowson v. Zubrod (In re Crowson), 431 B.R. 484 (B.A.P. 10th Cir. May 26, 2010) (Cornish, Nugent, Rasure), absent New York law defining rights of spouses to income tax refunds, interests of debtor and nondebtor spouse in refunds are determined by "separate filings rule," using Internal Revenue Service rulings. Each spouse has separate interest in reported income and overpayment of taxes. Each spouse's separate tax liability is determined by calculating what tax obligations would have been if spouses had filed separately, including contributions each spouse actually made to total payments. "This method takes into consideration taxes withheld, estimated tax payments, and other out of pocket payments, along with credits such as the earned income credit, the additional child tax credit and rebate credits." Court rejected 50/50 rule which had been adopted by other courts in New York under which tax refunds were evenly split between debtor and nondebtor spouse.).
In re Simms, No. 10-22579, 2011 WL 2604801, at *4-*6 (Bankr. D. Md. June 30, 2011) (Keir) (When married debtor files an individual Chapter 13 petition, CMI adjustment at Lines 13 and 19 on Official Form B22C will be "strictly scrutinized" based on factors; when debtor took no adjustment at Line 19, resulting disposable income calculation was probably inaccurate but defeats confirmation. "Prior to the changes to the Bankruptcy Code implemented by BAPCPA, courts regularly held that the incomes of both the debtor and a non-filing spouse must be included in the initial calculation of disposable income for purposes of plan funding. . . . [T]he Section 1325(b)(2) and B22C calculations of disposable income which are based upon current monthly income, should include a non-filing spouse's income only to the extent that the income is regularly contributed to household income. . . . Even with the BAPCPA changes, the equity of allowing a non-debtor spouse to exclude income is an issue in the good faith analysis required at confirmation. . . . Debtor's B22C statement may not accurately reflect the portion of the non-filing spouse's income which he does not contribute to household expenses. . . . [U]nder Section 101(10A), the entire income of the debtor's spouse is included in current monthly income only where it is a joint case. . . . In a non-joint case, the income of the non-filing spouse is included only to the extent it is used as a contribution to household expenses. Accordingly, line 13 of the B22C form is the opportunity for the debtor to subtract from the income calculation any of the non-filing spouse's income not regularly contributed to the household expenses. . . . [L]ine 19 of the B22C includes the opportunity for a debtor to include the marital adjustment for the purpose of determining disposable income . . . . In the instant case, although Debtor seems to argue that her non-filing spouse has income not being committed to the household expenses and which earnings he is unwilling to commit to plan funding, she has not taken a marital adjustment at line 19. Without such adjustment, all of the non-filing spouse's income is included in the 'current monthly income' upon which disposable income is then calculated. . . . If a marital adjustment is taken . . . such an adjustment, which in most cases will benefit an insider (spouse) of the debtor, should be strictly scrutinized by the court as it is susceptible to abuse. . . . Factors which may be reviewed in determining the allowance of a martial [sic] adjustment on B22C include the particular history behind the non-filed spouse's refusal to contribute all income to the household. . . . What are the specific facts as to the marital relationship and the debts to be discharged . . . ? . . . [T]he benefits received in exchange for the debt? . . . Is the non-filing spouse legally obligated to repay debts . . . ? . . . Were goods or services received in exchange for the indebtedness which receipt benefitted the non-filing spouse?").
In re Herrmann, No. 10-06523-JW, 2011 WL 576753, at *9-*10 (Bankr. D.S.C. Feb. 9, 2011) (Waites) (Social Security income is excluded from CMI by § 101(10A) and 42 U.S.C. § 407, but Social Security income must be fairly allocated to living expenses of joint debtors to satisfy good faith under § 1325(a)(3). Debtors excluded Social Security income from Official Form B22C and from Schedule I. The result was to allocate all of joint debtors' expenses to income other than Social Security income. Plan satisfied projected disposable income test but failed good faith. "According to Schedules I and J filed by Debtors in this case, Mrs. Herrmann proposes to assume the burden of paying Mr. Herrmann's share of their joint expenses and deducts them from her available income before committing her projected disposable income. This is proposed even though Mr. Herrmann has the ability to pay his share of the expenses through the use of his social security income. . . . Regardless of whether Mr. Herrmann's social security income is excludable under 42 U.S.C. § 407 as a source for the repayment of his debts, its legislative history makes clear that Congress intended the protection to allow the recipient to pay his ordinary and necessary living expenses. . . . Section 407 does not preclude this Court from considering whether it is good faith for a spouse, who does not receive social security income, to avoid paying her creditors to her full capability by deducting from her income the living expenses of a joint debtor who has the ability to pay his expenses from social security income. As the Supreme Court recently emphasized in [Ransom v. FIA Card Services, N.A., __ U.S. __, 131 S. Ct. 716, __ L. Ed. 2d __ (Jan. 11, 2011)], one of the fundamental purposes of BAPCPA is 'to ensure that debtors repay creditors the maximum they can afford.' . . . In this case, the issue is not whether Mr. Herrmann can be forced to use his social security income to pay his pre-petition debts, but rather whether Congress intended to protect a joint debtor's social security from being to be [sic] used to pay his own normal and customary living expenses. This Court does not believe that was Congress's purpose or intent. . . . Debtors' joint living expenses should be allocated fairly between them and Mrs. Herrmann should not be allowed to absorb more than her fair share of the expenses at the expense of her creditors. If done in this case, Mrs. Herrmann will have more income available to pay her creditors. . . . Absent evidence to the contrary, it would appear that joint expenses should either be shared equally or in the proportion that each debtor's income bears to the total family income.").
In re Waechter, 439 B.R. 253 (Bankr. D. Mass. Oct. 22, 2010) (Hoffman) (Plan in which debtor would pay disproportionately large portion of nonfiling spouse's household expenses lacked good faith. Premarital agreement provided couple would keep property and financial obligations separate throughout marriage but did not address day-to-day expenses. Court lacked authority in wife's Chapter 13 case to require nonfiling husband to pay his share of marital expenses, but under totality of circumstances, plan was not proposed in good faith.).
In re Vollen, 426 B.R. 359, 373 (Bankr. D. Kan. Mar. 19, 2010) (Nugent) (Distinguishing In re Shahan, 367 B.R. 732 (Bankr. D. Kan. Apr. 23, 2007) (Nugent), for a married debtor filing separately, CMI includes the debtor's income and that portion of the nonfiling spouse's income that is paid on a regular basis for the household expenses of the debtor or a dependent of the debtor; debtor should use Lines 13 and 19 on Official Form B22C to deduct portion of nonfiling spouse's income that was included in income at Line 13 but that was not paid on a regular basis for the household expenses of the debtor or a dependent of the debtor. Mortgage payments paid by the nonfiling spouse are included in the debtor's CMI and are not deducted at Line 13 or Line 19 when the property was acquired during the marital relationship for the purpose of housing the debtor and the couple's dependent daughter. "In these circumstances, . . . debtor is not entitled to a marital adjustment for the mortgage payments made by the non-filing spouse on the marital home because such mortgage payments are for the household expenses of the debtor and the debtor's dependent daughter and are therefore to be counted as part of [the debtor's] CMI under § 101(10A), not deducted on Line 19." College expenses and car payments for the dependent daughter paid by the nonfiling spouse are household expenses of the debtor, are included in the debtor's CMI and are not deductible as a marital adjustment on Line 19. Loan repayments by the nonfiling spouse and payments on a car loan by the nonfiling spouse are household expenses when the debts were incurred to buy food and apparel, including clothing for the couple's daughter, and to make car repairs on the daughter's car. These amounts are included in the debtor's CMI and may not be deducted at Line 19. Tax withholding from the nonfiling spouse's paycheck, 401(k) contributions by the nonfiling spouse and personal recreation expenses of the nonfiling spouse are not contributions to the household expenses of the debtor and are deductible at Line 19 as marital adjustments. A home computer is a household expense, and the debt for that computer may not be deducted at Line 19.).
In re Clemons, No. 08-82968, 2009 WL 1733867, at *3-*5 (Bankr. C.D. Ill. June 16, 2009) (Perkins) (Under § 101(10A)(B), mortgage payments and real estate taxes paid by nonfiling spouse are not included in CMI when debtor is not personally liable on mortgage. "[T]he income of a non-filing spouse is included only to the extent that it is regularly paid for the household expenses of the debtor or the debtor's dependents. . . . Though the Bankruptcy Code does not define the term 'household expenses,' mortgage related expenses and rent payments are unquestionably encompassed within the term . . . . The statute, however, requires inclusion of amounts regularly 'paid' for the 'household expenses of the debtor or the debtor's dependents' . . . . [C]ontributions are limited to amounts paid for expenses actually incurred by a debtor or a dependent. A 'constructive' contribution for a standardized expense allowed an above median debtor where no actual expense is incurred is not attributable to the debtor. . . . [A] debtor and the debtor's spouse are no longer presumed to be mutually dependent . . . . [T]he statute carries a dependency-in-fact requirement. The DEBTOR'S spouse is not a dependent. . . . [I]t is not appropriate to construe the term 'household expenses of the debtor or the debtor's dependents' as including mortgage related expenses on which the debtor has no contractual liability.").
In re McSparran, 410 B.R. 664 (Bankr. D. Mont. Mar. 27, 2009) (Kirscher) (Married debtor must account for nonfiling spouse's income for purposes of applicable commitment period calculation and disposable income calculation; unexplained failure to list income for spouse is fatal to confirmation. "Debtor failed to include his wife's income in Part I and made no marital adjustment in Part II. Debtor has the burden of proof under § 1325(a), and failed to explain the omission of his wife's income or to establish any marital adjustment, if appropriate. Such omission is material in determining the applicable commitment period and disposable income . . . . [C]onfirmation is denied." Chapter 13 case was filed in Montana for debtor claiming homestead in California. California is a community property state. Debtor "failed to show why his community property interest in his spouse's property and income was not include in Form B22C in calculating his current monthly income, applicable commitment period and disposable income.").
In re Green, No. 08-67270, 2008 WL 7880899, at *3-*5 (Bankr. N.D. Ga. Nov. 10, 2008) (Massey) (Adopting "majority rule," a nondebtor spouse has no CMI to "combine" with the debtor's CMI for purposes of the applicable commitment period calculation. Debtor had monthly income of $2,050 and included in CMI $1,580 contributed by her nonfiling spouse to the payment of her household expenses. "This Court adopts the majority rule. An individual who is not a debtor has no 'current monthly income.' . . . [S]ection 1325(b)(4)(A)(ii) must have the same meaning in a case of an unmarried debtor that it has in a case of a married debtor. . . . [T]he word 'combined' is, without qualification, surplusage in a joint Chapter 13 case, where the 'current monthly income of the debtor and the debtor's spouse' is the 'average monthly income from all sources that . . . in a joint case the debtor and the debtor's spouse receive,' 11 U.S.C. § 101(10A), because there is nothing to combine. Even more to the point, the words 'of the debtor's spouse combined' are surplusage in a Chapter 13 case filed by an unmarried debtor. Thus, the existence of surplusage in section 1325(b)(4)(A)(ii) reflects poor drafting, not obscured meaning.").
In re Stansell, 395 B.R. 457, 460-64 (Bankr. D. Idaho Oct. 16, 2008) (Pappas) (For applicable commitment period purposes, when debtor's spouse died one month before petition, "combined" CMI means debtor's CMI plus amounts paid on a regular basis by deceased spouse for household expenses of the debtor or a dependent of the debtor. "[T]o determine the applicable commitment period for a plan, the Code requires the Court to consider the 'current monthly income of the debtor and the debtor's spouse combined.' . . . If [the deceased spouse's] income is not included, Debtor is a below median income debtor, the applicable commitment period for his plan will be three years . . . . [I]f the spouse's income is included, it will push Debtor over the median income threshold, the applicable commitment period increases to five years . . . . [B]y virtue of the § 101(10A) definition, a non-filing spouse, has no 'current monthly income' for purposes of § 1325(b)(4). . . . [W]hile the non-filing spouse has no current monthly income, that portion of the non-filing spouse's income that was regularly contributed to the household expenses of the debtor during the relevant six-month time frame is included as part of the debtor's current monthly income. See § 101(10A)(B). . . . [Form B22C] is unsatisfactory . . . in the case of unmarried debtors because the option of taking the marital adjustment does not apply to them. . . . Instead of including all income received by the debtor as well as the debtor's nonfiling spouse, and then deducting on Line 13 that portion of the income which is not paid on a regular basis towards debtor's household expenses as a married debtor would do, an unmarried debtor must list his or her own income, and then add to it any amounts regularly received by the debtor from another entity for the household expenses of the debtor on Line 7. . . . It is indisputable that whatever income may have been contributed to Debtor's household in the past by his late-wife will not be available to him to use during the term of the plan to make payments to Trustee. Since Debtor's spouse is dead, it would seem the amount of income she received, or that the couple received, during the six months prior to Debtor's bankruptcy is irrelevant to Debtor's ability to pay his debts going forward. . . . But the wisdom of the current bankruptcy policy is of no moment here . . . . [T]he Court lacks any discretion in how Debtor's current monthly income is computed . . . . [O]nly the amount of Debtor's deceased wife's income received during the six months prior to the filing of his bankruptcy case that was actually contributed to pay Debtor's household expenses is includable in his current monthly income.").
In re Ariyaserbsiri, No. 07-41348, 2008 WL 5191200, at *3-*5 (Bankr. E.D. Tex. Sept. 17, 2008) (Rhoades) (To determine applicable commitment period under § 1325(b)(4), all of a nonfiling spouse's income is "combined" with the debtor's current monthly income. "[In re Grubbs, No. 07-32822-KRH, 2007 WL 4418146 (Bankr. E.D. Va. Dec. 14, 2007),] and [In re Borders, No. 07-12450, 2008 WL 1925190 (Bankr. S.D. Ala. Apr. 30, 2008),] reasoned that a non-filing spouse has no 'current monthly income' within the meaning of § 101(10A) and, therefore, the Chapter 13 trustee should insert a zero for the income of a non-filing spouse when calculating the applicable commitment period under § 1325(b)(4)(A)(ii). . . . This Court cannot simply ignore some of the words Congress chose to use in § 1325(b)(4)(A)(ii) and refuse to give those words their common, ordinary meaning. . . . [T]hat only a portion of the income earned by the Debtor's non-filing spouse is included in the calculation of the Debtor's 'disposable income' to be paid to unsecured creditors does not change the unambiguous statutory requirement imposed by § 1325(b)(4)(A)(ii) that the Debtor must use the full amount of his non-filing spouse's monthly income in calculating the required length of his proposed Chapter 13 reorganization plan.").
In re Lopes, No. 08-12008-JNF, 2008 WL 3893707, at *2-*3 (Bankr. D. Mass. Aug. 21, 2008) (Feeney) (Creditor failed to articulate "cogent objection under 11 U.S.C. § 1325(b)" to marital adjustment that included $410 per month for cigarettes for nonfiling spouse. When married debtor files individually, upon challenge, "the Chapter 13 debtor must demonstrate that the bankruptcy estate has not assumed responsibility for a disproportionate share of the reasonable household expenses." But "the objecting party 'has, at a minimum, the initial burden of producing satisfactory evidence to support the contention that the debtor is not applying all disposable income to plan payments.'".).
In re Sharp, 394 B.R. 207 (Bankr. C.D. Ill. Aug. 21, 2008) (Gorman) (Only portion of nonfiling spouse's income paid on a regular basis for household expenses of the debtor or a dependent of the debtor is included in CMI; "marital adjustment" is not subject to reasonable and necessary test and excess income of nonfiling spouse is not included in disposable income of debtor. "[T]he statute . . . limits the amount to be included in the calculation to that which is regularly used for the household expenses of a debtor and his dependents. . . . Here, the wife receives child support and is responsible for the care and custody of children who are not the dependents of the Debtor. . . . [T]he non-filing wife is not required to adjust her expenses to meet the reasonable and necessary standard of scrutiny that the Debtor's expenses must meet. . . . [E]ven if the wife has excess income after paying all of her bills and supporting her children, that income is hers and does not become disposable income of the Debtor.").
In re Dugan, No. 07-40899-13, 2008 WL 3558217, at *2-*6 (Bankr. D. Kan. Aug. 12, 2008) (Karlin) (For applicable commitment period purposes and to calculate CMI when a married debtor files individually, the debtor's CMI includes only that portion of the nonfiling spouse's income that is paid on a regular basis for the household expenses of the debtor or a dependent of the debtor; upon objection, debtor has burden to demonstrate that marital adjustment at Line 13 and Line 19 of Form B22C is supported by documentation of nonfiling spouse's separate expenses. "No one disputes that the portion of the non-filing spouse's income that is regularly contributed to the household expenses of a debtor or his dependents must be included as part of that debtor's current monthly income, as that term is specifically defined under § 101(10A)(B). . . . [W]hen the income of a non-filing spouse is not available to cover household expenses—because the non-filing spouse has demonstrated an intent not to contribute a certain amount of his or her income to the filing spouse or to cover the filing spouse's expenses,[—] that money need not be included as part of Debtor's current monthly income and should not be included to determine the applicable commitment period under § 1325(b)(4)(A)(ii). . . . The Court can think of no reason why Congress would require the Court to treat a married debtor, who elects not to file jointly with his spouse, as if the case was filed jointly solely for the purpose of calculating the applicable commitment period, but provide different treatment for all other aspects of the means test. . . . Instead, the Court finds the more reasonable interpretation of § 1325(b)(4) is that Congress inadvertently failed to include the qualifier that the spouse's current monthly income must only be 'combined' with the filing debtor in a joint case by putting those words in parenthesis (or elsewhere), as it did in the definition of current monthly income. This interpretation of the statute brings the treatment of the spouse's income into conformity with how that income is treated elsewhere in the means test calculations and avoids an anomalous result. . . . [I]t is appropriate for a married debtor filing individually to deduct on Line 13 that portion of his or her non-filing spouse's income that is not paid on a regular basis for the debtor's (or his dependents') household expenses, since that is income to which such debtor does not have access to fund the plan or pay monthly household expenses. . . . Debtor bears the burden of proving that he is devoting all of his disposable monthly income to his Chapter 13 plan, and the Court will not allow this Debtor, or any other debtor, to arbitrarily pick a number out of the air for a marital adjustment on Lines 13 and 19 without providing sufficient documentation . . . . Debtor must demonstrate that he really does not have access to the funds to help pay the expenses of the household. . . . Debtor . . . must provide evidence satisfactory to the objecting party or the Court to support that deduction when that information is requested. That proof can take the form of receipts, documents, testimony or some other form of credible, admissible evidence. . . . In Debtor's brief, he claims that his wife has approximately $628 withheld from her paycheck each month to pay her income taxes. The taxes Debtor's wife's employer is required to withhold . . . is not money that is used 'on a regular basis' for Debtor's (or his dependents') household expenses, would thus not fall within § 101(10A)(B), and could therefore be properly deducted on Line 19. It appears that in this particular case, that single deduction, alone, would be sufficient to support the deduction sought on Line 19 if Debtor would merely provide the Trustee documentation[.]".).
In re Louviere, 389 B.R. 502 (Bankr. E.D. Tex. Apr. 4, 2008) (Parker) (When filing debtor's income changed substantially after petition, it is appropriate to discard Form B22C; to then determine projected disposable income, Schedule I and J require detailed income and expense information for nonfiling spouse—including a proportional allocation of household expenses. "Schedule I clearly requires that detailed income figures for a spouse must be provided 'by every married debtor, whether or not a joint petition is filed, unless the spouses are separated and a joint petition is not filed.' Thus, in every instance, a debtor is compelled to disclose all of the monthly income received by a non-filing spouse as of the date of filing. That requirement cannot be circumvented by the unilateral insertion of a household contribution amount from a nonfiling spouse as a single line item in Schedule I." Based on ratio of incomes of spouses, court allocated expenses and concluded that debtor "satisfactorily demonstrated that the bankruptcy estate has not assumed a disproportionate share of the reasonable family expenses.").
In re Crego, 387 B.R. 225 (Bankr. E.D. Wis. Apr. 2, 2008) (Kelley) (Married debtors separated and pending divorce have "special circumstances" for purposes of § 707(b)(2)(B) that justify additional expenses and downward adjustment of disposable income; special circumstances expenses are limited to amounts specified in National and Local Standards.).
In re Grubbs, No. 07-32822-KRH, 2007 WL 4418146, at *2-*3, *4-*5 (Bankr. E.D. Va. Dec. 14, 2007) (Huennekens) (To determine applicable commitment period when married debtor files individually, nonfiling spouse's income is included only to the extent used to pay debtor's household expenses under § 101(10A)(B). Married debtor listed $4,270.95 of income attributable to debtor and $4,400 a month attributable to debtor's spouse. At Line 13 of Form B22C, debtor took a marital adjustment of $2,900 to exclude portion of income of nonfiling spouse that was not regularly paid toward expenses of debtor's household. "By definition, a debtor's spouse has no current monthly income except in a joint case. In a single case, current monthly income applies solely to that income derived by the debtor. The definition of 'current monthly income' includes income received by the debtor's spouse only when the debtor has filed a joint case with his or her spouse. . . . [T]he portion of income that the debtor's spouse regularly contributes toward household expenses is included already in the determination of the applicable commitment period under § 101(10A)(B) because that money is part of the debtor's current monthly income. . . . The phrase 'and the debtor's spouse' in § 1325(b)(4)(A)(ii) acknowledges that the debtor's spouse will have current monthly income in a joint case . . . . In the case of a married debtor filing individually, . . . 'current monthly income' instructs the Court to add zero as the current monthly income of the nonfiling spouse." With respect to difference in language in instructions at Line 13 and Line 17 of Form B22C: "Line 19 permits a debtor to take a marital adjustment for purposes of determining disposable income. . . . The additional language included in the instructions for completing line 13 was designed to allow debtors to adopt either of the interpretations of § 1325(b)(4)(A)(ii) that are before the Court today. . . . [I]t was proper for the Debtor to take the marital adjustment on line 13 of Official Form B22C.").
In re Barnes, 378 B.R. 774, 779-80 (Bankr. D.S.C. Oct. 26, 2007) (Waites) (Bonus received by nonfiling spouse during six months before petition is included in CMI when debtor failed to prove that bonus was not regularly paid for household expenses of debtor. Nonfiling spouse received $6,000 bonus within six months before petition. The amount of future bonuses was uncertain. Because bonus was received by nonfiling spouse and not by debtor, bonus was not included in CMI by § 101(10A)(A). "However, since it appears that Debtor's husband has sufficient monthly income to meet his separate expenses, the burden shifts to Debtor to demonstrate, by a preponderance of the evidence, that the bonus is not paid on a regular basis for her household expenses. Debtor did not present any testimony about how the bonus was specifically used and therefore the Court finds that such a bonus could effectively be used to pay for Debtor's household expenses." Although the amount of future bonuses was "somewhat speculative," "if paid in the future, the bonus should be captured in Debtor's plan payment absent evidence that the bonus is necessary for the husband's non-household expenses. . . . Debtor shall provide the Trustee with written notice of her husband's annual bonus within ten (10) days after the bonus is received by her or her husband. The bonus shall be remitted to the Trustee within twenty (20) days of its receipt absent motion by Debtor that the bonus is necessary for her husband's non-household expenses.").
In re Charles, 375 B.R. 338, 340-42 (Bankr. E.D. Tex. Sept. 18, 2007) (Portion of nonfiling spouse's income that is used to pay nonfiling spouse's car note is not current monthly income and does not become CMI when car note will be paid off before debtor completes payments under plan. "The precise manner in which the income of a non-filing spouse is to be considered in the calculation of a Chapter 13 debtor's projected disposable income under § 1325(b) has always been problematic. . . . [T]he jurisprudence consistently imposed upon a Chapter 13 debtor a duty to demonstrate, in the face of a disposable income objection, that the bankruptcy estate had not assumed a disproportionate share of the reasonable family expenses. . . . [T]he Trustee's objection in this instance—a demand that the Debtor must include a step-up in her plan payments upon the conclusion of her non-filing spouse's car payment obligations—essentially relies upon the most liberal strain of that pre-BAPCPA jurisprudence which would compel the contribution of all family income to the plan, without regard to filing status. . . . Under BAPCPA, the contribution of a non-filing spouse of a Chapter 13 debtor has now been clearly defined under the Code. New § 101(10A)(B) . . . . The contribution demanded of a non-filing spouse in this context is now limited to the actual household expenses paid by that spouse for the benefit of the debtor or her dependents—a contribution far more narrow in scope than the position espoused by the Trustee . . . . [W]hen he completes his automobile installment payments . . . Mr. Charles, as a non-filing spouse, will be free to utilize that segment of his income in his sole discretion. It is not required to be contributed to his wife's plan. . . . [I]t is no longer a component of the debtor's projected disposable income for the purposes of § 1325(b)(1)(B).").
In re Shahan, 367 B.R. 732, 737-40 (Bankr. D. Kan. Apr. 23, 2007) (Nonfiling spouse cannot deduct her separate secured debts and separate dependent expenses at Lines 47 and 59, but these amounts are properly excluded from CMI as part of marital adjustment at Line 19. "[I]f a debtor's non-filing spouse has income, that portion of the spouse's income not dedicated to paying household expenses is deducted from CMI. This deduction is effected on Line 19 of Form B22C as a 'marital adjustment' for amounts 'not regularly contributed' to the household expenses. . . . In Robert's case, he took a $706.19 marital adjustment on Line 19. Debra testified that this figure represents her withholding from her paycheck. . . . Debra's withholding is not dedicated to household expense and is justifiably deducted on Line 19 as a martial adjustment. . . . Line 47 provides for the deduction of future payments to be made on secured debts. . . . These total $885.18 per month and relate to debts of Debra's alone, secured by the home Debra and Robert inhabit and Debra's vehicle. Robert is not a titled owner on either the home or vehicle. . . . The . . . payments are not Robert's obligations; they are Debra's alone. Based on the plain language of the statute, the Court does not believe that future secured debt payments by a non-filing spouse are deductible on Line 47. . . . [T]he Court disallows the Line 47 deductions for Debra's secured debt payments . . . but suggests that the marital adjustment on Line 19 be increased in the amount of $885.18, the sum of Debra's two payments. . . . Debra's recreation and loan payment expenses do not qualify as other necessary expenses as contemplated under § 707(b)(2). Similarly, Debra's payments to her daughter do not qualify. The Court cannot hold that these expenses do not qualify as household expenses necessary to the health and welfare of the debtor or his family and at the same time hold that they are included in . . . § 101(10A). . . . [W]hile the recreation expenditures, loan repayments, and support of an adult child by the non-filing spouse are not deductible as other necessary expenses on Line 59, they are allowable as further marital adjustments under § 101(10A) and are therefore appropriate marital deductions from CMI on Line 19.").
In re Hall, No. 06-71296, 2007 WL 445517, at *3 & n.2 (Bankr. C.D. Ill. Feb. 12, 2007) (unpublished) (When filing debtor was unemployed during six months before petition and nonfiling spouse pays all household expenses, CMI includes the nonfiling spouse's income to extent the debtor has household expenses. "As pointed out in [In re Quarterman, 342 B.R. 647 (Bankr. M.D. Fla. 2006)], the trustee has the burden of proving how much, if any, of a non-filing spouse's income should be imputed to a debtor when making the disposable income calculation. . . . [A]ny of the non-filing spouse's income which is imputed to a debtor should correspondingly be offset by the payment of the household expenses for which the debtor is also responsible. That is, determination of the portion of the non-filing spouse's income to be included at Part I of the CMI is based on the debtor's available deductions for household expenses at Part IV of the CMI. Only the portions of the non-filing spouse's income which are actually used to pay household expenses should be included in the Part I income calculation. Other income of the non-filing spouse not used to pay household expenses is not considered in calculating either disposable income or projected disposable income." In a note, "[a]lthough a non-filing spouse's gross income is required to be included at line 2 of Form B22C, line 19 allows a deduction of the portions of such non-filing spouse's income which are 'NOT regularly contributed to the household expenses . . .' Use of line 19 appears to be the proper way, at least initially, to identify the portion of a non-filing spouse's income which should not be included in calculating a debtor's disposable income.").
In re Lara, 347 B.R. 198, 202-03 (Bankr. N.D. Tex. June 28, 2006) (For purposes of the vehicle-operating cost component of the Local Standards for transportation, spouses in a joint case are treated as a unit; when the unit owns two cars, the two-vehicle expense allowance is appropriate, not two one-vehicle allowances. "11 U.S.C. § 707(b)(2)(A)(ii)(I) . . . does not permit each debtor in a joint case to take a one vehicle expense allowance. Rather, the debtor and the spouse of the debtor in a joint case are considered a unit for means-testing purposes, and they are entitled to take the vehicle expense allowance applicable to their household—here, the two vehicle expense allowance.").
In re Quarterman, 342 B.R. 647, 650-52 (Bankr. M.D. Fla. Mar. 28, 2006) (To determine disposable income, nonfiling spouse's income is not included in CMI except amounts regularly paid for household expenses of the debtor or the debtor's dependents. "Prior to BAPCPA . . . [t]he majority of courts have held that the court must consider the income of a non-debtor spouse in calculating the debtor's disposable income. . . . Congress amended the definition of disposable income, in section 1325(b)(2), to state that disposable income means 'current monthly income received by the debtor . . . less amounts reasonably necessary to be expended' . . . . The parenthetical [in § 101(10A)] stating that, in a joint case, a debtor's current monthly income shall include the debtor's spouse's income suggests that, in a single case, the spouse's income is not included in the debtor's current monthly income; otherwise, the parenthetical would be superfluous. However, part (B) of section 101(10A), states that current monthly income also 'includes any amount paid by any entity other than the debtor (or in a joint case the debtor and the debtor's spouse), on a regular basis for the household expenses of the debtor or the debtor's dependents (and in a joint case the debtor's spouse if not otherwise a dependent) . . .' . . . . [B]ased upon the explicit language of section 101(10A), current monthly income does not include all the income of the non-debtor spouse, but rather only amounts expended on a regular basis for household expenses. . . . The burden is on the objecting party, here the Trustee . . . . Due to the absence of evidence before the Court as to the amount that the Debtor's spouse regularly contributed toward household expenses of the Debtor or the Debtor's dependents, the Court cannot presume that the Debtor's spouse regularly contributed nearly two-thirds of her income toward household expenses of the Debtor. Consequently, the Debtor is left with no disposable income to contribute to his plan.").