《楊清泉律師專欄》SOCIAL SECURITY BENEFITS NOT PART OF DISPOSABLE INCOME …(Part I)
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SOCIAL SECURITY BENEFITS NOT PART OF DISPOSABLE INCOME IN CHAPTER 13 BANKRUPTCIES
In a Chapter 13 bankruptcy, the amount of plan payment is the amount of disposable income of the debtor arrived at after calculating income and expense using the means test. Therefore, if debtor has monthly net income of $5,000 and monthly deductible expenses of $4,700 allowed by the means test, the disposable income and plan payment is $300 for 60 months if debtor is over median, and 36 months if debtor is below median household income in the state of residency. The question being asked is whether or not social security benefits are considered as part of disposable income in a chapter 13 case. For instance, if debtor still works and receives net income of $2,000 monthly but also receives social security of $1,000 while his monthly deductible expenses is $1,800, is his monthly disposable income $200 or is it $1,200? As you can readily see, social security benefits could make a big difference in the amount of plan payment if it is part of disposable income. If social security is part of disposable income, the monthly plan payment in chapter 13 would be $1,200; otherwise, it would only be $200. What do you think?
Section 101(10A) of the bankruptcy code states that “The term ‘current income’ means the average monthly income from all sources that the debtor receives (or in a joint case the debtor and the debtor’s spouse receive) without regards to whether such income is taxable income, derived during the 6-month period…(B) includes any amount paid by any entity other than the debtor… on a regular basis for the household expenses of the debtor or the debtor’s dependents… but EXCLUDES benefits received under the Social Security Act…”. Moreover, Section 522(d)(10)(A) of the bankruptcy code states that debtor’s right to receive social security benefit, unemployment compensation, or a local public assistance benefit, veteran’s or disability or unemployment benefit is EXEMPT and not part of the bankruptcy estate.
《楊清泉律師專欄》SOCIAL SECURITY BENEFITS NOT PART OF DISPOSABLE INCOME IN CHAPTER 13 BANKRUPTCIES (Part II)
In a Chapter 13 bankruptcy, the amount of plan payment is the amount of disposable income of the debtor arrived at after calculating income and expense using the means test. Therefore, if debtor has monthly net income of $5,000 and monthly deductible expenses of $4,700 allowed by the means test, the disposable income and plan payment is $300 for 60 months if debtor is over median, and 36 months if debtor is below median household income in the state of residency. The question being asked is whether or not social security benefits are considered as part of disposable income in a chapter 13 case. For instance, if debtor still works and receives net income of $2,000 monthly but also receives social security of $1,000 while his monthly deductible expenses is $1,800, is his monthly disposable income $200 or is it $1,200? As you can readily see, social security benefits could make a big difference in the amount of plan payment if it is part of disposable income. If social security is part of disposable income, the monthly plan payment in chapter 13 would be $1,200; otherwise, it would only be $200. What do you think?
Section 101(10A) of the bankruptcy code states that “The term ‘current income’ means the average monthly income from all sources that the debtor receives (or in a joint case the debtor and the debtor’s spouse receive) without regards to whether such income is taxable income, derived during the 6-month period…(B) includes any amount paid by any entity other than the debtor… on a regular basis for the household expenses of the debtor or the debtor’s dependents… but EXCLUDES benefits received under the Social Security Act…”. Moreover, Section 522(d)(10)(A) of the bankruptcy code states that debtor’s right to receive social security benefit, unemployment compensation, or a local public assistance benefit, veteran’s or disability or unemployment benefit is EXEMPT and not part of the bankruptcy estate.
《楊清泉律師專欄》SOCIAL SECURITY BENEFITS NOT PART OF DISPOSABLE INCOME IN CHAPTER 13 BANKRUPTCIES (Part II)
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