504 B.R. 871
Bankr. N.D. Ohio2014Background
- Debtor filed a voluntary Chapter 13 petition and amended plan on June 14 and August 16, 2013 respectively, proposing $1,270 monthly for 36 months.
- Trustee objected, arguing Debtor’s annualized current monthly income (CMI) exceeded Ohio median for a household of the relevant size, triggering a 60-month commitment.
- Seven individuals lived in Debtor’s home at various times: Debtor, his Wife, Debtor’s two children, and Wife’s three children.
- The court considered three definitions of “household” (heads-on-beds, IRS dependent, economic unit) and ultimately adopted the economic unit definition.
- Presumptions governed household size: a dependent listed on Debtor’s or non-filing spouse’s tax return is presumed in Debtor’s household, while non-listed dependents are presumed not in the household unless proven otherwise.
- Debtor’s household, under the adopted presumptions and the economic unit definition, was found to be four members (Debtor, Wife, one Debtor child, one of Wife’s children), leading to an above-median CMI and denial of plan confirmation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Definition of household for the means test | Skiles argues for a broader definition to reduce CMI | Kendig adopts the economic unit definition | Economic unit adopted; four-person household used for CMI comparison |
| How to treat non-debtor income and household sharing | Trustee seeks strict inclusion of non-debtor income | Income contributions from Wife should be considered within CMI | Non-debtor contributions considered under economic unit; clarified in analysis |
| Counting part-time children in the household | Skiles counts both children as full members | Counts should reflect actual time with Debtor | Part-time counting adopted; two children count as one member based on time with Debtor |
| Burden and evidence standards for household size | Trustee bears burden to prove deviations from schedules | Debtor’s representations presumed accurate unless rebutted | Presumptions adopted; burden shifts with evidence; case-by-case evaluation required |
Key Cases Cited
- Johnson v. Zimmer, 686 F.3d 224 (4th Cir. 2012) (definition of household; adopts economic unit analysis in Sixth Circuit context)
- Ransom v. FIA Card Servs., N.A., 131 S. Ct. 716 (Supreme Court 2011) (discusses consistency of dependent concepts across tax and bankruptcy)