When a Chapter 13 trustee complains that the means test is not easy to administer when only one spouse files, should I be sympathetic?
After all, Chapter 13 confirmation is often a negotiation on disputed issues between the trustee and debtor’s counsel.
Here’s what I said recently at ConsiderChapter13.org on that issue.
Come on, Madame Trustee, get over it. What is there about BAPCPA that leads you to expect that it or its misbegotten spawn of a means test treats debtors fairly or equally?
And where does the Chapter 13 trustee have a mandate to challenge the filing of a case by a debtor whose spouse will not or cannot join in the filing?
The Bankruptcy Code clearly permits a married person to file without their spouse. I see no basis to deny relief to one spouse or to hedge that relief because their spouse does not file.
The single spouse filing has become more attractive for debtor’s counsel in a world of longer periods between bankruptcy filings and Chapter 13 debt limits that disqualify homeowners in sections of the country that once had a hot real estate market.
I will join in the chorus of boos about how the means test is obscure. In so many ways, it simply does not fit neatly with a myriad of real world configurations.
How does it apply to the recently married, the recently widowed, the family whose composition will change when the expected baby is born? What’s the logic of including family support received in Chapter 7 but backing it out in Chapter 13?
Face it, this is simply an instance of drafter’s malpractice. The formerly explicit power of judges to determine whether expenses were reasonable or the plan non-abusive has been superseded by a judicial warrant to interpret an opaque and ill-conceived statute.
I sympathize with your difficulty in determining how to assess the appropriate elements of the marital deduction. We don’t get much help in the statute.
Some expenses seem obviously deductible: support arising from a previous marriage and debts incurred pre-marriage come to mind. It’s harder to find an analytic line for debts incurred during marriage in the non-filer’s name only. Is the deciding factor who is liable or the purpose of the expenditure?
But looking at the issue of fairness from another perspective, why should a creditor who has no claim against the non-filing spouse get the benefit of all of the non-filing spouse’s income? If the creditor expected recourse against the spouse, they should have bargained for it at the inception of the debtor/creditor relationship. Is the creditor any worse off than they would have been had the marriage failed before the bankruptcy case was filed?
Join debtors’ counsel in trying to make sense out of nonsense.
Image courtesy of aka kath