August 9, 2009
New Case on Household Size
In re Bostwick, 406 B.R. 867 (Bkrtcy, Minn 2009)
Issue: May the debtor claim a “household of two” when she lives in a single family residence with an unrelated individual as roommates and nothing more? Must she include the roommate’ share of the rent and utilities in her current monthly income?
Holding: Yes, it is a household of two. Yes as to the utilities but no as to the rent.
Judge Robert J. Kressel:
The chapter 13 debtor lives in a house with a guy but they have separate leases, separate bedrooms, and do not share food, toiletries etc. They share the common areas of the home. They split the utilities but nothing else. The home has a third bedroom which is vacant waiting for the owner to find a third lessee. The debtor claimed a household of two which made her a below-median debtor. She did not include any of his income in her CMI. She proposed a 36 month plan. The trustee objected saying it was a household of one putting her above-median and therefore must be a 60 month plan. The trustee also said the CMI must include the roommate’s share of the rent and utilities.
The bankruptcy judge overruled the objections. He said the roommate’s share of the utilities must be included in CMI because they shared the cost but the rent was not shared because they had separate leases. With the utilities, the debtor was still below-median.
As to the household size, Judge Kressel wrote:
I have previously addressed the meaning of “household” in the context of § 1325(b)(4) and concluded that because [the code] defines the ‘median family income’ as ‘the median family income both calculated and reported by the Bureau of the Census,’ ” it is only fair to use the Census Bureau's definition of household: “all of the people, related and unrelated, who occupy a housing unit.” (citing U.S. Census Bureau, Current Population Survey (2004), available at http:// www. census. gov/ population/ www/ cps/ cpsdef. html). Generally, a single-family home shared by unrelated persons is a single housing unit whose occupants comprise a single household, and the residence shared by Bostwick and Weis is no exception. The relationship among residents is not a consideration in the Census Bureau's definition, and nothing in the Bankruptcy Code compels unique treatment for households comprised of unrelated members.
The Census Bureau considers whether “A house, an apartment or other group of rooms, or a single room, ... is occupied or intended for occupancy as separate living quarters; that is, when the occupants do not live and eat with any other persons in the structure and there is direct access from the outside or through a common hall” The criteria of separateness and direct access are not met here.
Although Bostwick and Weis each are entitled to private use of some parts of the house-each has a separate bedroom, storage area and parking stall-it remains a single-family home, with a shared bathroom, kitchen, living room, yard, and laundry. The trustee argues that the separate leases and separate bedrooms have transformed the single-family home into a rooming house, but Bostwick lives with Weis as two ordinary roommates might, despite their separate leases. Because of the layout of the house, it is not possible for Bostwick to enter her bedroom without passing by their living room or kitchen. There is no direct access from the outside. There are times that they are both in the kitchen or living room. They do not eat together, but they share a refrigerator, a microwave oven and a stove. Bostwick must cross Weis's basement storage space to get to the laundry machines. None of this rises to the level of “separateness” that the Census Bureau's definition of housing unit requires. In fact, the Census Bureau's definition specifically includes “unrelated people sharing a housing unit such as partners or roomers” Id. (“A household includes ... all the unrelated people, if any, such as lodgers, foster children, wards, or employees who share the housing unit. A person living alone in a housing unit, or a group of unrelated people sharing a housing unit such as partners or roomers, is also counted as a household.”).
Although the Census Bureau excepts “group quarters” from its definition of “household,” the exception is limited to unusual housing situations unlike the common roommate situation presented in this case. According to the Census Bureau, group quarters are “noninstitutional living arrangements for groups not living in conventional housing units or groups living in housing units containing ten or more unrelated people or nine or more people unrelated to the person in charge.” Id. Bostwick and Weis, despite their separate leases, are a single household for the purposes of 11 U.S.C. § 1325(b)(4), and Bostwick is entitled to claim a household of two.
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