Johnson v. Zimmer, 686 F.3d 224, 230–40 (4th Cir. 2012) (Wilkinson, King, Agee)

Rejecting “heads on beds” and “income tax dependent” approaches, “economic unit” is proper method to determine household size and fractional children are considered. “[Section] 707(b) means test calculation will be affected by the threshold determination of how many people are part of her ‘household,’ as determined for purposes of § 1325(b). . . . [I]t is not immediately clear how to define ‘family’ even as part of the determination of a ‘household.’ . . . Because the term ‘household’ ‘lends itself to more than one reasonable interpretation,’ it is ambiguous. . . . [N]othing in § 1325(b) directly or indirectly incorporates the Census Bureau’s definition of ‘household.’ . . . [T]he heads-on-beds approach . . . is wholly unrelated to any bankruptcy purpose and does not serve the Code’s objective of identifying a debtor’s deductible monthly expenses and, ultimately, his or her disposable income. . . . It makes little sense to allow debtors to broadly define their ‘households’ so as to include individuals who have no actual financial impact on the debtor’s expenses. . . . [U]nlike the heads-on-beds approach, the economic unit approach is consistent with § 1325(b), the BAPCPA, and the Code as a whole. By examining the financial interdependence of individuals to determine whether someone is an economic part of the debtor’s household, bankruptcy courts are able to avoid over- and under-inclusive results that would result by artificially defining ‘household’ according to factors unrelated to which individuals within a residence impact the debtor’s financial situation. . . . Under this method, a debtor’s ‘household’ would include individuals who operate as an ‘economic unit’ with the debtor . . . . In contrast to the ‘economic unit’ approach, the income tax dependent approach fails to match the goals of the BAPCPA and the Code. . . . [T]he income tax dependent approach tends to be under-inclusive for purposes of ascertaining a debtor’s household size and disposable income. . . . [D]ividing individuals into fractional members of a household is less than ideal. At the same time, we recognize that the Debtor’s situation is increasingly common in modern American life, and that the number of individuals with a financial relationship to a debtor may well vary depending on the day of the week and other circumstances.”

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