## Facts

- Tanya Rene Johnson filed a voluntary Chapter 13 petition in the Eastern District of North Carolina and sought confirmation of a plan supported by Form 22C.
- Johnson claimed a household size of seven: herself, her current husband, two sons shared with her ex-husband William Zimmer, and three stepchildren from her husband’s prior marriage.
- Johnson and Zimmer had joint custody of their two sons; the sons lived with Johnson about 204 days per year, and neither parent paid child support, instead sharing certain expenses.
- The three stepchildren lived with Johnson and her husband about 180 days per year.
- Zimmer objected to confirmation, arguing that Johnson overstated household size, which increased allowable expense deductions and reduced projected disposable income available to unsecured creditors, including debts for which both Johnson and Zimmer were jointly liable.
- The bankruptcy court adopted an economic-unit variant that prorated part-time residents as fractional household members based on days in the home, then rounded the total; it determined the household size was five and denied confirmation with leave to amend.
- The bankruptcy court certified the household-size question for direct interlocutory appeal; the Fourth Circuit accepted the appeal, and the Chapter 13 trustee intervened supporting Zimmer.

## Issues

1. Whether, for calculating projected disposable income under 11 U.S.C. § 1325(b), “household” may be defined by an economic-unit approach focusing on financial interdependence with the debtor.
2. Whether, under that approach, a bankruptcy court may treat part-time residents as fractional household members prorated by their time in the debtor’s home and round the resulting total.

## Decision

- The Fourth Circuit affirmed the denial of plan confirmation with leave to amend.
- It held that a bankruptcy court may determine “household” for § 1325(b) means-test purposes using an economic-unit approach.
- It held that, within that approach, part-time residents may be counted fractionally based on days of residence and the total may be rounded for use in the means test.
- It upheld the bankruptcy court’s determination that Johnson’s household size was five.

## Legal Principles

- When the Bankruptcy Code does not define “household” for Chapter 13 projected disposable income calculations, courts may adopt a definition that best fits § 1325(b)’s function of measuring ability to pay.
- An economic-unit definition of “household” may be used, focusing on whether individuals’ finances are interdependent with the debtor and reflect the debtor’s real expense burdens.
- For individuals who live in the home only part of the year (including children in joint-custody arrangements and stepchildren with split residency), a court may prorate household membership to match the portion of the year the debtor bears day-to-day support costs.
- Fractional household calculations may be rounded to produce a workable household size for means-test inputs.

## Conclusion

The Fourth Circuit held that Chapter 13 household size under § 1325(b) may be calculated by an economic-unit approach and may account for part-time residents through fractional, time-based counting, affirming denial of confirmation where the debtor’s asserted household size overstated her economic responsibilities.


Johnson v. Zimmer, 686 F.3d 224 (4th Cir. 2012)