Definition of “Household” For Means Test

The new bankruptcy law says that you automatically can file for Chapter 7 bankruptcy without further means testing if your average monthly income over the prior six months is below Florida’s median income. The applicable median income depends on your household size. Many people are unclear how to determine the size of your household, and particularly, how household size is related to family size. More than one blog reader has asked me questions about household definition. The new bankruptcy law does not make clear the definition of household for determining if a particular debtor is below the applicable median income.

I came across a helpful explanation which was posted on a listserve for bankruptcy lawyers. The post explained:

” A household consists of all people who occupy a housing unit regardless of relationship. A household may consist of a person living alone or multiple unrelated individuals or families living together. Households thus are subdivided into family and nonfamily households.

A housing unit is a house, an apartment, a mobile home or trailer, a group of rooms, or a single room occupied as a separate living quarters, or if vacant, intended for occupancy as separate living quarters. Separate living quarters are those in which the occupants live separately from any other individuals in the building and which have direct access from outside the building or through a common hall. For vacant units, the criteria of separateness and direct access are applied to the intended occupants whenever possible. ”

I hope this posted definition helps you understand the size of your household for purposes of the means test under the new bankruptcy law.