A Chapter 13 bankruptcy case involved the trustee reviewing the debtors income and expenses. This review includes an analysis of the debtors house hold size. Where the IRS may allow a person to claim an adult child as a dependant often times trustees are not so generous. The concept that I've heard the trustees office explain to many different debtors is that there's no legal obligation to take care of a child once they reach the age of 18. There's no economical requirement and there's also no legal obligation. It can sound like a harsh concept in this country where many parents are still helping out their adult children with school expenses while living within the debtors home rent free. But, the trustees are charged with making sure that the debtors are making their best efforts in their proposed re payment plans. Essentially, I've heard an appointed trustee say,
"creditors should not be paying for an adult child to go to school"
The concept there is if the debtor is allocating $500 dollars for a 19 year old to go to school, that $500 dollars is not going then to go to pay down creditors. Depending on the overall review of the trustees office for the income and expenses there may not be a large adjustment required if you have an child adult living at home. However the trustee can request that a contribution from an adult child come into the household to pay for such things as utilities that are going to be increased because they're living there such as their food and clothing expenses.
The Brighter Side of Chapter 13 Bankruptcy
Remember the big picture with Chapter 13 cases, while you may not be able to pay for your 21 year old school expenses -- while it appears to hurt that your 21 year old has to help you pay for some utilities, food expenses and their share of rent the relief of a chapter 13 case can be monumental. Typically, there are no lawsuits being filed during a Chapter 13 case, there's no creditor phone calls, and potentially your only paying back a small portion of a debt stretched over 5 years and you're only paying back what you have disposable at the end of the month.