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cfortunato
cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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Is Veterans Administration Disability Compensation considered

Customer Question

Is Veterans Administration Disability Compensation considered to be income if a spouse is filing for bankruptcy protection alone?
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 1 year ago.

Customer:

Hi - my name is XXXXX XXXXX X'X a Bankruptcy and Consumer Protection attorney here to assist you.

Customer:

1) Are you asking about a Chapter 7 or a Chapter 13 Bankruptcy?

Customer:

2) Are both spouses living together in the same household?

JACUSTOMER-ibz9w4v8- :

7 or 13 ..2) yes

Customer:

Thank you for your response.

Customer:

For both a Chapter 7 and a Chapter 13 Bankruptcy, a non-filing spouse's VA Disability income is included on Schedule I and also on form 22A/22C to the extent that the income is contributed to the household.

Customer:

In other words, VA Disability income is not treated in the same manner as income from the Social Security Administration.

Customer:

This applies to spouses who are living in the same household.

JACUSTOMER-ibz9w4v8- :

so then va Compensation in bankruptcy is income or compensation for loss?

Customer:

Are you asking about a monthly VA Disability payment? I am not sure what you mean by a compensation for loss.

JACUSTOMER-ibz9w4v8- :

yes , I have been told by no less than 7 attorneys according to code the compensation is not income therefore not taxable therefore is compensation correct or not?

Customer:

VA Disability compensation is included as income for Bankruptcy filing purposes. Absolutely the only income that is not included is Social Security Administration compensation.

JACUSTOMER-ibz9w4v8- :

thanks...so for the means test its to be factored in...?

Customer:

Yes - compensation from the VA - including disability compensation - must be included on form 22A (Means Test).

Customer:

However, if any of that money is not contributed to the household (eg. money is sent to support a dependent who does not live with the couple), that amount does not get included for the Means Test.

JACUSTOMER-ibz9w4v8- :

So a non filing spouse who has their own debts and no other debt would be required to contribute part of their compensation to satisfy the filing spouse debts in a 13---

Customer:

The non-filing spouse's payment of debts in his or her name only would not be included for the Means Test - as that would be income that is not being contributed to the household.

JACUSTOMER-ibz9w4v8- :

Now that makes more sense...thank you for your time.. but there still seams to be a wide range of opinions ... I have a little more understanding...that is all for now.

Customer:

You're welcome!

cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience: Bankruptcy professor.
cfortunato and other Bankruptcy Law Specialists are ready to help you
Expert:  cfortunato replied 1 year ago.
Our chat has ended, but you can still continue to ask me questions here until you are satisfied with your answer. Come back to this page to view our conversation and any other new information.

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Customer: replied 11 months ago.

I had cancelled after my question but was charged an additional amount anyway.


So as a follow up to my original question ...Is the marital adjustment available for means test , when non-filing spouse has only va compensation and does not use all monies for household expenses but has credit card bills in their name only , etc .?

Expert:  cfortunato replied 11 months ago.

Yes - the marital adjustment is available to subtract any income the non-filing spouse earns that is not contributed to the household. Any income the non-filing spouse receives that is not contributed to the household qualifies for the marital adjustment. This includes VA compensation.
Additionally, the marital adjustment is available whether or not all of the debts belong to the filing spouse only, whether there are any debts that belong to the non-filing spouse only, or whether there are any debts that belong to both spouses.

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