The “Means Test” was implemented in 2005 as a way of preventing consumers with the ability to pay back their debts from filing for chapter 7 bankruptcy. Determining a household size for purposes of the Means Test can be simple or complicated depending on the family. The proper method for determining household size is an unsettled area in Bankruptcy law. Because the means test is based on the annual median income for the household, the size of the household can be critical in determining whether a debtor qualifies for a Chapter 7 bankruptcy. A household has been recognized to include spouses and dependent children, however, a household can include nonrelated individuals. Despite the efforts of Congress to reform the Bankruptcy Code with enactment of the Bankruptcy Abuse and Prevention Consumer Protection Act of 2005 (BAPCPA), the revisions did not include a definition of household, family or dependents.

As a general rule, the debtor must be supporting the household member(s) to qualify as part of the household. See In re Jewell , 365 BR 796 (Bankr SD Ohio 2007). The court recognized the Trustee’s unofficial test in Jewell as requiring: (1) the group of people live together for more than one year; (2) the group of people pooled their income; and (3) that the group acted as an economic unit. Jewell, 365 BR at 800 n5 . Additional qualifications may exist depending on the Jurisdiction, however, it is safe to assume any Bankruptcy Court will be hesitant to broaden the definition of a household at creditors expense. If faced with this issue, a debtor should contact an experienced bankruptcy attorney to discuss the potential pitfalls of including unrelated persons for purposes calculating the number of individuals in the household.