Do I Have to Include a Spouse's Income When Filing for Bankruptcy?

Full Question:

I am considering Chapter 7 Bankruptcy. I am married but filing alone. By business debt is $98,000 and non business debt $89,000. I understand I might not have to MEANS TEST because I have more business debt than consumer debt, but my wife & I have a combined income of $178,000 out of which mine is only $12,000 and right now I am unemployed.After all our expenses including the payment on my debt ($3400 a month) we do have some money left over each month.My question is in a Bankruptcy filing on my own do I have to list my wife's income and if so is there a chance the court put me into Chapter 13 rather than Chapter 7?
08/16/2011   |   Category: Bankruptcy   |   State: Illinois   |   #25334

Answer:

With the changes in the bankruptcy laws which became effective in October 2005, Congress stated specifically that unless the spouses are legally separated or living apart (and not just for the purpose of evading the bankruptcy laws) or have a valid prenuptial agreement, then the non-filing spouse’s income must be included in the means test analysis (which is one of the several eligibility tests now required). [11 U.S.C. 707(b)(7)(B)].

Based on the income level you described, it is possible the court would require you to file a Chapter 13 bankruptcy. If your monthly disposable income falls under $166.67, you can file for Chapter 7 bankruptcy. Otherwise, if you wish to file for bankruptcy, you must file for Chapter 13.