Can You Claim Your Kids as Dependents When Filing for Bankruptcy in Florida if You Don’t Have Primary Custody?

The section of the U.S. Bankruptcy Code that addresses claiming dependents on the means test is Section 707(b)(2). The means test is utilized in Chapter 7 bankruptcy cases to determine whether a debtor's income is sufficiently low to qualify for a Chapter 7 discharge or if they should file for Chapter 13 bankruptcy instead.

Section 707(b)(2)(A)(iii) deals explicitly with claiming a deduction for the "applicable median family income" based on the number of dependents the debtor has, which may include minors. The deduction for dependents helps to adjust the debtor's income to determine if they pass the means test for Chapter 7 bankruptcy.

The Bankruptcy Code does not explicitly define "household," but bankruptcy courts typically follow one of three different approaches to define that term. As described in greater detail below, those three approaches are:

1. The "heads-on-beds" approach follows the Census Bureau's comprehensive definition of a household as "all the people who occupy a housing unit" without considering the relationship, financial contributions, or financial dependency.
2. The "income tax dependent" method derived from the Internal Revenue Manual's ("IRM") definition that examines which individuals are currently or could potentially be included on the debtor's tax return as dependents
3. The "economic unit" approach evaluates the number of individuals in the household who operates as a single economic unit. It includes those who are financially reliant on the debtor, those who financially assist the debtor, and those whose financial activities are interwoven with the debtors.

In most cases, to claim a child as a dependent for bankruptcy purposes, you typically need to have legal custody of the child or be the primary custodial parent. If you do not have primary custody, claiming them as a dependent in bankruptcy might be challenging. Usually, the custodial parent is the one who can claim the child as a dependent for bankruptcy exemptions and tax purposes.

However, bankruptcy laws can be complex and might have exceptions or different rules depending on your location, specific circumstances, and the type of bankruptcy you're filing (e.g., Chapter 7 or Chapter 13).

For instance, in some situations, a non-custodial parent may be able to claim the child as a dependent if they provide a significant portion of the child's financial support. If you show that, despite not having primary custody, you still have significant monthly expenses related to the time you spend with and for your children, you can factor these expenses into your Means Test or Disposable Income calculations.

Please note that bankruptcy laws can be complex, and the specific requirements for claiming dependents on the means test may vary depending on the current laws in your jurisdiction and the details of your individual situation. Therefore, it's essential to consult with a qualified bankruptcy attorney for advice tailored to your circumstances and goals.

Call Fleysher Law Now To Schedule a Free Consultation With Our Bankruptcy Attorney

When facing the complexities of claiming kids as dependents in bankruptcy, Fleysher Law is your trusted partner for expert guidance and support. Here are five compelling reasons why you need us on your side:

1. In-Depth Knowledge: Our experienced bankruptcy attorneys understand the U.S. Bankruptcy Code, including Section 707(b)(2), ensuring we navigate the means test and deduction for dependents with precision.
2. Tailored Strategies: We recognize that each case is unique, and our team will develop personalized strategies based on the three different approaches to defining "household" to maximize your chances of successfully claiming your children as dependents.
3. Complex Exception Handling: Bankruptcy laws are intricate, and exceptions exist. Our attorneys are adept at identifying exceptions that may apply in your specific situation, especially if you lack primary custody, potentially allowing you to claim your children as dependents if you provide substantial financial support.
4. Location-Specific Expertise: Laws can vary depending on your location. As a Florida-based firm, we deeply understand the state's bankruptcy regulations, ensuring you receive accurate advice tailored to Florida's specific requirements.
5. Compassionate Advocates: We understand the emotional toll that bankruptcy can take, especially when family matters are involved. At Fleysher Law, we offer compassionate support throughout the process, helping you confidently secure your family's financial future.

Don't navigate the complexities of claiming kids as dependents in bankruptcy alone. Let Fleysher Law be your guide, providing the expertise and personalized solutions you need for a successful bankruptcy filing.

Schedule a consultation with us today and take the first step towards securing a brighter financial future for you and your children.