§ 91.4     Debtor or Dependent
Cite as:    Keith M. Lundin, Lundin On Chapter 13, § 91.4, at ¶ ____, LundinOnChapter13.com (last visited __________).

To be deductible in the disposable income test, expenses must be reasonably necessary for the maintenance or support “of the debtor or a dependent of the debtor.”1 The term “dependent” is not defined in the Bankruptcy Code.


The reported decisions discussing dependency for § 1325(b) purposes are fact-bound. One court, after reviewing the definition of dependent in the Internal Revenue Code, in other federal laws, and under state law, concluded that the debtor’s 72-year-old mother was a dependent and that the partial support provided by the debtor was deductible under § 1325(b)(2)(A).2 In contrast, because “there must come a time when the debtors realize that legal obligations take precedence over moral obligations,” one court refused to allow expense deductions for support of the debtors’ 32-year-old daughter who was a recovering alcoholic or for a sister who suffered from cerebral palsy.3 Another court found that a cotenant not related by blood or marriage to the debtor and the cotenant’s daughter were not dependents.4


Extended families are testing ground for the concept of dependent in § 1325(b). The Bankruptcy Court for the District of New Mexico faced this issue in In re Gonzales.5 The debtor’s family included an 18-year old son living at home and an almost 18-year old grandchild. The bankruptcy court found that dependent in § 1325(b) included both children. This explanation is an attractive guide for similar cases:

While Ward and June Cleaver and their two sons Wally and Beaver may represent for many people the “typical” or “normal” family, tens of millions (or more) of the population of this country live in family or household units that include one or more adult children and/or their children, (great)grandparents and (great)grandchildren, uncles and aunts, nieces and nephews, and cousins of various degrees of relationship, to say nothing of “blended” families (children from their parents’ previous marriages brought together into one family) and families that foster a child or take in a neighbor child escaping a bad situation at home. Indeed, for much of the history of this country, the extended family was more common and traditional than the “nuclear” family. . . . [T]his Court believes the line should be drawn far enough out to recognize and protect any genuine family unit.6

The Bankruptcy Court for the Eastern District of Michigan analyzed the boundaries of dependency with respect to children in college. In (coincidentally) In re Gonzales,7 the budget allocated $300 per month and $400 per month for living expenses for the debtors’ 19- and 21-year-old daughters to attend undergraduate college. The question at confirmation was whether these amounts were reasonable and necessary “for the maintenance or support of . . . a dependent” in the context of a plan that paid 28 percent of unsecured claims.


The court first considered a dictionary definition of dependent: “a person who is supported financially by the debtor and who reasonably relies on such support.”8 The court found this naked definition insufficient for § 1325(b) purposes because “the more pertinent question is whether it is reasonable under the circumstances for the court to permit the debtor to undertake the obligation of supporting the would-be dependent.”9 The court recast the issue as a balancing of the interests of the debtors in supporting their daughters and the rights of creditors to suffer only expenses that are truly reasonable and necessary:

I agree with those cases which have rejected the notion that the existence of a legal obligation to provide support should be used as a hallmark in determining whether a dependent relationship exists for Code purposes. . . . On the other hand, it is also clear that at some point in time, under some circumstances, the debtor’s moral obligation to provide support for her children becomes sufficiently tenuous that it must yield to the countervailing interest of the debtor’s creditors in receiving payment.10

The court concluded that the debtors’ college expenses were necessary and reasonable:

In my view, debtors may continue to assist (i.e. support) a child, who notwithstanding having attained majority, has not yet “left the nest” without forfeiting the opportunity to repay their creditors through chapter 13. . . . [W]hen the case involves relatively young adults studying for their baccalaureate degrees at a relatively reasonably-priced state university, one cannot say that, in everyday parlance, the children are not still “dependent” on their parents. . . . Ehren and Gretchen are still considered dependents of their parents by the Internal Revenue Service and by the Debtors’ medical and hospitalization insurer. In short, society is prepared in this day and age to accept the notion that a 19-year old and a 21-year old undergraduate college students [sic] are still their parents’ dependents.11

Gonzales offers a sensible approach to the meaning of dependent in § 1325(b) in the context of grown children in college. The decision necessarily leaves much to the discretion of bankruptcy judges to measure the dependency claimed by a debtor. The absence of a statutory definition is consistent with flexibility in determining dependency under § 1325(b)(2)(A).


It makes sense to deduct a nonfiling spouse’s reasonably necessary expenses for purposes of determining the debtor’s disposable income. This would be required by § 1325(b)(2)(A) when the nonfiling spouse is a dependent of the debtor. If the nonfiling spouse is not dependent on the debtor, but the nonfiling spouse’s income is included in the debtor’s projected income,12 then it is fair to also deduct the nonfiling spouse’s reasonably necessary expenses. Most courts include the nonfiling spouse’s income and deduct the nonfiling spouse’s expenses for purposes of § 1325(b).13 On unusual facts, one court was persuaded to allocate only half of the household expenses to the debtor for purposes of calculating disposable income when it was demonstrated that the debtor had a long-standing prepetition agreement with his nonfiling spouse to share household expenses equally.14


Section 1325(b)(2) could be interpreted, on the right facts, to exclude the expenses of a nonfiling spouse from the disposable income calculation. The test in § 1325(b)(2) is based on income “which is received by the debtor and which is not reasonably necessary to be expended—for the maintenance or support of the debtor or a dependent of the debtor.”15 Spouses living separately at the petition might separately account for income and expenses, and the nonfiling spouse’s income would not be “received by” the debtor. A husband and wife who have separate incomes and expenses from separate businesses, who pool a portion of their incomes and expenses, might argue for a disposable-income-test calculation that does not include all of the nonfiling spouse’s separate income and expenses. A debtor who does not expend income for the maintenance or support of a dependent cannot claim that dependent’s expenses as deductions for disposable-income-test purposes.


The bankruptcy courts should continue to develop a definition for dependent in § 1325(b)(2)(A). That the debtor chooses to support another individual should not alone be controlling; however, the absence of a legal obligation under state law should not preclude a debtor from deducting expenses for the support of someone who is financially dependent. In a state where 18 is the age after which there is no legal obligation of support, if the debtor is providing actual support to an adult for a compelling reason, reasonable deductions should be allowed for § 1325(b) purposes. There is precedent for this approach in dischargeability litigation under 11 U.S.C. § 523(a)(5), where the bankruptcy courts have developed “federal common law” of support with guidance from state law but without being bound by it.16


1  11 U.S.C. § 1325(b)(2)(A).


2  In re Tracey, 66 B.R. 63 (Bankr. D. Md. 1986).


3  In re Clements, 185 B.R. 903, 909 (Bankr. M.D. Fla. 1995). See also In re Ferrell, 227 B.R. 706, 710 (Bankr. S.D. Ind. 1998) (Plan fails disposable income test because debtors “overstated their expenses, by including expenses for supporting adult children.”).


4  In re McKean, 81 B.R. 9 (Bankr. W.D. Tex. 1987).


5  297 B.R. 143 (Bankr. D.N.M. 2003).


6  297 B.R. at 150–52.


7  157 B.R. 604 (Bankr. E.D. Mich. 1993).


8  157 B.R. at 609.


9  157 B.R. at 609.


10  157 B.R. at 610.


11  157 B.R. at 610.


12  See § 164.1 [ Projected (Disposable) Income ] § 91.2  Projected (Disposable) Income.


13  See, e.g., In re Cardillo, 170 B.R. 490 (Bankr. D.N.H. 1994) (Nondebtor spouse’s income and expenses are considered to determine whether all of the debtor’s disposable income is applied to the plan.); In re Schnabel, 153 B.R. 809 (Bankr. N.D. Ill. 1993) (Nondebtor spouse’s social security benefits are included in disposable income for § 1325(b) purposes because the wife’s share of expenses was accounted for as part of the debtor’s overall living expenses in the Chapter 13 case. To hold otherwise would require the debtor’s creditors to “subsidize” the debtor’s spouse’s living expenses and would be unfair and unjust in a Chapter 13 case involving a joint household.); In re Belt, 106 B.R. 553 (Bankr. N.D. Ind. 1989); In re Rose, 101 B.R. 934 (Bankr. S.D. Ohio 1989); In re Saunders, 60 B.R. 187 (Bankr. N.D. Ohio 1986).


14  In re Harmon, 118 B.R. 68 (Bankr. E.D. Mich. 1990).


15  11 U.S.C. § 1325(b)(2) (emphasis added).


16  See, e.g., Harrell v. Sharp (In re Harrell), 754 F.2d 902 (11th Cir. 1985); Boyle v. Donovan, 724 F.2d 681 (8th Cir. 1984); Pierce v. Pierce (In re Pierce), 95 B.R. 154 (Bankr. N.D. Cal. 1988).