my lawyer says my debts and judgments don''t come out of the household income when determining our debt ratio, disqualifying me from ch7. Is that true?

Your bankruptcy lawyer is absolutely correct, assuming you are referring to general unsecured debts, and not, for example, a debt secured by a vehicle or a mortgage on your home.  A debt is not a necessary living expense.  More importantly, the entire point of the budget analysis in determining whether or not you qualify for a Chapter 7 vs. a Chapter 13 or Chapter 11, is your ability to pay your creditors.   It makes no sense to pretend those debts are expenses and then claim you can't afford to pay anything to them.  If people could avoid making any payments on their debts simply because the debts are too high, everyone would simply increase their debts to the point where they can't afford to pay anything to them.  That's obviously ludicrous. Mark J. Markus, Attorney at Law Handling exclusively bankruptcy law cases in California since 1991. http://www.bklaw.com/ bankruptcy blog: http://bklaw.com/bankruptcy-blog/ Follow Me on Twitter:  @bklawr