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Does my girlfriend’s contribution to utilities hurt my ability to qualify for chapter 7 bankruptcy?

Reader Question:

I live with my girlfriend who has her house paid-off. I pay her $450 month for my share of the food and utilities. I earn just under the cutoff to be able to file for Chapter 7 BK. The problem, as I see it, is would I have to include what she pays toward the household utilities (which are all in her name) as additional income for me? If so, I can’t file Chapter 7 and won’t be able to discharge my $70K in cc debts. I was just approved for long-term disability through my employer if that matters. I am unable to work.

Attorney Answer

Answered by Queens bankruptcy attorney Allan Bloomfield.

A question was asked about how to account for shared living expenses. The questioner lives with a girlfriend in the girlfriend’s house (which is paid off) and contributes $450.00 for his share of the food and utilities. The questioner wondered if the girlfriend’s payments toward the household utilities would be additional income.

When unmarried people share living quarters, each is usually considered a separate family unit for purposes of bankruptcy. This is important because there are two chapters under which almost all individuals file, either Chapter 7 or Chapter 13. Under Chapter 7, debts are forgiven (with exceptions for taxes, student loans and debts acquired by fraud) and no payments are made to the creditors. Under Chapter 13, some payment is made through the court’s trustee to creditors, and can range from a few percent to 100 percent depending on the income of the person filing for bankruptcy.

Obviously most people would rather file under Chapter 7 and not have to pay any of their debts. However, if your income is above a certain level, the law requires one to file under Chapter 13 and pay some debts back. In this case, the questioner was wondering if his girlfriend’s payments towards the utilities would be income to him, and thus bring him over the limit, requiring him to file in a Chapter 13. This consideration of whether someone is over or under the amount allowed in a Chapter 7 is often referred to as whether they pass the “means test.” When one “passes” the means test, one is able to file under Chapter 7.

If the questioner has no children or other dependents living with him, he would be a family of one and would be able to earn between $35,784 (in Mississippi) and $62,098 (in Hawaii) annually, depending on where he lives, and still qualify for Chapter 7. If he has one child living with him, the range would be from $44,832 (in Mississippi) to $83,489 (in Alaska).   For each additional child, the amount increases proportionately. None of his girlfriend’s payments towards shared utilities would be income to him. It would be as if he was living alone and his food and utility costs were the $450.00 he gives to his girlfriend.

Interestingly, if the girlfriend were to file a bankruptcy (and she would probably not want to do so because she owns a paid-off house) she would have to include his payments in her income as rental income, which would increase her income for purposes of the means test. However, since the questioner is not the owner, and is paying to live there, he is treated as if his expenses for living there are $450.00, and his income is not increased by the girlfriends payments for food and utilities.


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