When filing for Chapter 7 bankruptcy, a debtor with income below the state’s median income (for his household size) automatically qualifies for Chapter 7 bankruptcy. But what exactly is household size? And, who can you include in your household? Generally speaking the bankruptcy court includes your spouse and dependents in your household size; but it could include anyone living in the house and contributing to the expenses depending on the bankruptcy court and judge handling the case.
For example, some bankruptcy judges use the household definition used by the U.S. Census Bureau which states that “a household includes all of the people, related and unrelated who occupy a house, apartment, group of homes or single room intended for occupancy as a separate living quarter.” This definition is much more inclusive and could work for or against the debtor filing for bankruptcy depending on the income of the other people in the household.
If there are several people living in your household and you want to file for bankruptcy, discuss how household size may affect your bankruptcy case with a qualified bankruptcy attorney.