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cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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Hi again, I was wondering if you could tell me how my income

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Hi again,
I was wondering if you could tell me how my income will be considered in the BK. Like I mentioned above, I am self-employed as a child therapist in private practice and I make about 15-18K a year. I also receive 4200 a month in child support from my exhusband. Will the child support be considered in my ability to pay off these mortgages from the home I am hoping to discharge? I use the child support money to pay for my sons' schooling and a large portion goes into their savings each month in their names. It seems very unfair for that to be taken to pay off this mortgage. Any guidance is helpful.


How many are in your household?

Customer: replied 6 years ago.
There is myself, my new husband, my two sons (ages 4 and 6), and his two children (ages 4 and 5) (which are here part time but he pays child support for).

1) What is your husband's gross annual income, and

2) how much does he pay for child support?

3) Is there any other income coming into the household? If yes, what and how much is it?

Customer: replied 6 years ago.
Well - my new husband's income is around 300K a year gross. But we have a prenuptial agreement that separates all of his income and assets from mine. We do not comingle anything. We do not own anything together. He would not be filing for BK - just me.

He pays about 5K a month in child support to his ex-wife.

I do not have any other sources of income (other than my private practice which is around 15K a year). I gave up my alimony when I remarried.

The only way your current husband's income would not be taken into account is if you were legally separated. This is in spite of the fact that there is a pre-nuptial in place, and in spite of the fact that you are keeping your assets and income separate.

In any event, with a household of 4 (the children who stay part time would not be included), you would not be able to file a Chapter 7 Bankruptcy with an annual gross household income of more than $61,836. This would include the child support payments you receive, and the child support payments that your husband pays would be subtracted.

Customer: replied 6 years ago.
So my husbands assets and income are protected from garnishment by my creditors by the prenuptial, BUT they are still considered in the means test for whether I can file for chapter 7 - correct?

We are not going to get legally separated anytime soon, so what is my best option here? Should I NOT file and just wait for the judgments to start coming? I really cannot pay this money back, so I'm not sure what my options are.

I just carefully re-read the statute. You do not include the portion of your husband's income that is not contributed to the household. If he is keeping his money separate, that money does not count.

Additionally, when you consider your income, you are supposed to look at the net gross, which is the gross minus all business expenses (but before subtracting income taxes).

Since you bring in $50,400 from child support, if you can show only $11,436 additional net gross income from your practice and whatever money your current husband contributes to the household, it is possible to file a Chapter 7.

Customer: replied 6 years ago.

I think it would be entirely possibly to only show that much income from my practice especially since this is the year I started it and I moved it to Idaho as well.

Are these amounts based on the Idaho Statute or the Utah Statute, since you said I would need to file in Idaho but use the Utah exemptions.

I realize this has gone back and forth several times, so I will be including a hefty tip for you!
Thank you so much!

Whether or not you can file depends on the Idaho Means Test guidelines. The exemptions (Utah in this case) are the items you are allowed to keep when you file a Bankruptcy.

One other thing - when you take into account what your husband contributes to the household, that amount is not supposed to include what "was NOT paid on a regular basis for the household expenses of the debtor or the debtor's dependents". Bankruptcy Form 22A. In other words, any money your husband contributes to the household that does not benefit you or your children does not count.

Edited by cfortunato on 11/5/2010 at 4:40 PM EST
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