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Abstract
Congress enacted the Bankruptcy Abuse Prevention andConsumer Protection Act of 2005 (BAPCPA) with the express purposeof limiting the number of consumer debtors eligible to file a Chapter 7case, which typically lasts only a few months and eliminates thedebtor’s unsecured debts. Under BAPCPA, bankruptcy courts mustdetermine the size of a consumer’s household to determine whether theconsumer is eligible for Chapter 7. If the consumer is ineligible, theymust instead file a Chapter 13 case and commit to a five-year debtrepayment plan. Because Congress failed to define the term“household” in BAPCPA, courts have developed numerousapproaches to determine household size that are often applied unfairlyto debtors with non-traditional families
For example, after filing a Chapter 13 bankruptcy case, onedebtor learned that her five children—two biological children andthree stepchildren—counted as only 2.59 members of her household,even though all five children lived with her at least half the year andshe cared for them the same. This decrease in household sizesignificantly reduced the debtor’s allowed standardized expenses andthereby caused her projected disposable income to substantiallyincrease. Financially distressed debtors in this position are thenrequired to pay much more to unsecured creditors through arepayment plan and, as a result, suffer a financial penalty imposed bybankruptcy courts. The fractionalization of a debtor’s underagechildren is just one illustration of the modern family debacle somebankruptcy courts have created as they struggle to decide which of thedebtor’s loved ones counts as household members under BAPCPA. Inturn, this Article—in keeping with one of BAPCPA’s objectives ofremoving judicial discretion by way of objective standards—proposesthat Congress amend BAPCPA to define the term “household” tocreate a presumption in favor of counting typical household occupants(e.g., under-age biological and stepchildren who are part-timeresidents) as full household members.