Bankruptcy - How is income of boyfriend relevant?

[jchumley]

What is the name of your state? Virginia

My girlfriend is looking at Chapter 7 - liquidation - personal bankruptcy.

My girlfriend lives with me. Right now she doesn't work - between jobs. She was divorced 2 years ago and she has a lot of medical bill debt ~ $20K for herself and her children, mostly related to the fact that she has no health insurance. She just can't get caught up and has decided to declare bankruptcy. When she does work, she only earns about $8/hr so it's not like she has an opportunity to catch up on that debt.

She went to visit a lawyer and the lawyer said he needed to know my income, bills, etc. How is my income relevant to her declaring bankruptcy? This is not a common law marriage state and it's not a community property state so I do not know how anything related to my personal finances has anything to do with my girlfriend. I'd appreciate your comments as to how this could be relevant.

 

[Ladynred]

How is my income relevant to her declaring bankruptcy?

Because under the new law, HOUSEHOLD INCOME is considered when calculating income and expenses for the means test. It doesn't amtter that you are not married, you live under the same roof. The theory is this: if YOU could handle paying ALL of her normal living expenses freeing up her income to pay her creditors, then she could wind up in a Ch 13 doing just that.

It might be a stupid 'theory', but that's about what it is. You can thank the bozos in Congress and the banking and credit card companies who bought that BK reform bill for that little gem.

Chances are in the end it won't make much difference. Her income is probably way below the median for the state and since you are not OBLIGATED to pay her living expeneses, she'll get the Ch 7 anyway.