## Facts

- Thomas C. Herbert filed a voluntary Chapter 7 bankruptcy petition in the Western District of North Carolina and completed Official Form B22A to determine whether § 707(b) required further means-test calculations.
- Herbert lived in one residence with his girlfriend and nine children: one child was Herbert’s biological daughter with the girlfriend, and eight were the girlfriend’s children from a prior relationship.
- The group had lived together for several years, and Herbert had consistently provided financial support to his girlfriend and the children.
- The biological father of the girlfriend’s eight children was incarcerated. Herbert had tried to adopt the eight children but could not obtain the father’s consent.
- Herbert treated the children as dependents in his bankruptcy paperwork and claimed all nine children as dependents on his tax returns; his schedules described the eight non-biological children as “stepchildren,” even though Herbert and the girlfriend were not married.
- On Form B22A, Herbert claimed a household size of 11 (himself, his girlfriend, and the nine children).
- Herbert reported current monthly income (CMI) of $9,125, which included about $1,600 per month in food-stamp benefits received by the girlfriend; his annualized CMI was $109,500.
- Using a household size of 11, Herbert compared his annualized CMI to the North Carolina median family income for 11 people ($111,469) and fell below the median, so he did not complete the remaining means-test steps on Form B22A.
- The Bankruptcy Administrator moved to dismiss the case under § 707(b), arguing Herbert was entitled to claim only a two-person household (Herbert and his biological daughter). Under that view, the applicable North Carolina median family income would be $49,259, and Herbert would appear able to pay unsecured creditors through a Chapter 13 plan.

## Issues

1. How should “household size” be determined on Form B22A for the § 707(b)(7) median-income comparison?
2. May a Chapter 7 debtor include a live-in, unmarried partner and the partner’s children who reside in the home and are supported by the debtor when calculating household size for § 707(b)?

## Decision

- The court denied the Bankruptcy Administrator’s motion to dismiss under § 707(b).
- The court held Herbert could claim a household size of 11 for the § 707(b)(7) median-income comparison.
- Because Herbert’s annualized CMI was below the North Carolina median for a household of 11, he qualified for the § 707(b)(7) safe harbor and was not required to complete additional means-test calculations based on the Administrator’s narrower household definition.

## Legal Principles

- The Bankruptcy Code and the Official Forms do not define “household” for § 707(b), so courts must supply a workable meaning consistent with the statute’s use of Census-based median-income figures.
- “Household size” for § 707(b)(7) is not limited to persons related to the debtor by blood or marriage, or to those who meet a strict tax-dependent test.
- A practical, economic-unit view of the household may include individuals living together where the debtor bears real, ongoing responsibility for their support.
- When the debtor’s annualized CMI is below the applicable state median income for the correctly determined household size, § 707(b)(7) shields the debtor from dismissal based on the means-test abuse framework urged by the movant.

## Conclusion

In re Herbert held that, for § 707(b)(7) and Form B22A, “household size” may be determined by the debtor’s actual living and support unit rather than formal legal relationships. Because Herbert lived with and supported his girlfriend and her eight children, the court allowed him to count them in a household of 11, placing his annualized income below the state median and requiring denial of the Bankruptcy Administrator’s motion to dismiss for abuse.


In re Herbert, 405 B.R. 165 (2008)