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WALLSTREETESQ
WALLSTREETESQ, Attorney
Category: Bankruptcy Law
Satisfied Customers: 17080
Experience:  14 years exp., CH 7 AND 13 Bankruptcy cases, AFL-CIO UNION PLUS, UFT NYSID AND ALL MAJOR UNIONS
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Chapter 13 Do they count social security benefits as income

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Chapter 13 Do they count social security benefits as income ?

WALLSTREETESQ :

Hello I am a licensed attorney here to help you with your question, please review my response and do not hesitate to ask for clarificati on

WALLSTREETESQ :

Social security payments do not count as income for computation of means test eligibility under the new bankruptcy law

WALLSTREETESQ :

The issue whether Social security should be counted in a chapter 13 case as part of your disposable income was addressed In Hamilton v. Lanning, the U.S. Supreme Court It stated that a bankruptcy court may consider changes to a debtor’s income and expenses that are certain or virtually certain. This means that courts are very likely to take into consideration Social Security income when calculating disposable income

Customer:

What? This seems like double talk. Is it or isn't it counted as income?

Customer:

What makes you eligible or not eligible ?

WALLSTREETESQ :

A chapter 13 bankruptcy has two areas where income is considered.

WALLSTREETESQ :

1. for means test purposes, which is required, social security income is not counted as income,

WALLSTREETESQ :

2. On the second and more important part the disposable income, social security is counted, and that will affect your chapter 13 payment plan

WALLSTREETESQ :

A chapter 13 can be filed if you have income, and disposable income left over every month

WALLSTREETESQ :

to pay your creditors over a 5 year payment plan, you would only have to pay the amount you have left over every month.

WALLSTREETESQ :

So if you have $100 disposable income after your income and expenses, you only pay your creditors $100 per month for 5 years, regardless of how much credit card debt you have

Customer:

Thank you for clarifying that. Does paying college Tuition for your daughter count as an expense?

WALLSTREETESQ :

yes, all monthly expenses are included,

WALLSTREETESQ :

In fact if you have no money left over every month consider a chapter 7 bankruptcy,

WALLSTREETESQ :

where their is no payment plan, and you can discharge all your debts

Customer:

Could you discharge a 2nd mortgage on your home?

WALLSTREETESQ :

yes, but only if the entire loan is underwater, or not secured,

WALLSTREETESQ :

so if the second is $100,000

WALLSTREETESQ :

and the first is $400,000

WALLSTREETESQ :

If the home is worth only $399,000

WALLSTREETESQ :

the entire 100,000 is unsecured, and can be lien stripped

Customer:

Even under chapter 7, I was told you can only do it under chapter13?

WALLSTREETESQ :

no, it can only be in a chapter 13, in a chapter 7 you cannot lien strip

Customer:

How about taxes are they deducted from your income?

WALLSTREETESQ :

yes, all payroll taxes and deductions are taken off

Customer:

I am self employed are they still taken off my income?

WALLSTREETESQ :

yes

Customer:

Thank You. You have been very helpful, I need to go to work now. Craig

WALLSTREETESQ :

Good luck, and if satisfied with our service please press the accept button so we can receive credit

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