Can you give me some advice about SSDI?

[lookingforward]

My husband has filed for SSDI. If all goes well, he might get his first payment in December. We were waiting to file to let time pass between his last work paycheck and also for some time to pass for credit card usage. I think I am understanding that SSDI isn't counted on the means test, but would have to be counted for a budget and could possibly push a Chapter 13, is that correct? Also, if we filed before he started getting SSDI, which we really don't know if December will for sure happen, would we still have to consider the SSDI in a budget?

[flashoflight]

I know plenty of very disabled people who have been denied SSDI and it could take years to get approved with an attorney to get approved. Since his last paycheck wasn't that long ago, I would say the chances of first approval is low absent an acute, serious, and permanent injury.

[justbroke]

Social Security payments can't be used to "force" you into a Chapter 13. But, if you need a Chapter 13 to protect property, then that income will be included in your available income. If you intend to file Chapter 7, then none of this is an issue at all.

[lookingforward]

Sorry, I should have said....he is stage 4 chronic kidney disease. Stage 5 is dialysis which is an automatic approval. He currently meets the SS guideline books lab test parameters. Also he is recovering from colon cancer, has been cancer free since June 2019!!! He is still taking maintenance chemotherapy. But true, we absolutely do not know for sure if he will get approved by the medical department, but he has been approved by the eligibility department. When talking to the rep from the eligibility dept, it sounded very positive. The actual truth though, is right now we don't know if or when he will be approved.

[lookingforward]

We would like to file Chapter 7. We have about 37K in equity in our house, and in Louisiana we can exempt 35. That's the single only property issue. I am just worried that we have filed for SSDI, and that extra income might make us have to file a Chapter 13.

[justbroke]

I want to send my sincerest prayers for his comfort during this time.

Many conditions and diseases (about 200) fall under the Social Security Administration's "compassionate allowances" program. The program allows payments to be made prior to approval. Most disabilities take as many as 2 years before SSDI is approved. It's sad to say that many people died while waiting on benefits to be approved. The purpose of the program is to be compassionate about the claimant's care and to provide benefits quickly. While back-pay is allowed, most people have to hire attorneys to get SSDI after being denied during the first round.

From what I understand, these compassionate payments would not be clawed back should the claim be ultimately denied. At least that's how I understand the program. Please don't take my word for how the program works as SSDI is a very complex government-regulated program. It literally takes years to be approved.

(A claimant that is legally blind will also be on the fast-track, and usually receives very quick approval.)

Bottom line is that for the purposes of Chapter 7 (and for the initial Means Test for Chapter 13), SSDI income is not included in the debtor's "current monthly income" (CMI) as that's excluded under the bankruptcy code.

[lookingforward]

Thank you, justbroke, for your prayers. They are much appreciated.
Can I ask another question here.....I have met with our lawyer and in the midst of many other questions, did not really pin him down concerning ssdi counting in income vs ssdi income counting in budget going forward. We are filing Chapter 7. My husband has not started getting SSDI, and we have no idea if or when he will, we were told his first payable month was December, but that depends on if/when he gets approved. That would be his back payment date if approval comes later. So if we file Chapter 7, and sometime before our 341 or before our discharge he started getting SSDI, would that throw out our Chapter 7 and we would have to start over with a 13?

[justbroke]

As for a Chapter 7, the only issue will be protecting any back pay. SSDI is not income for purposes of the Means Test so should you not have any other income, you should clearly qualify for a Chapter 7 discharge. SSDI payments "only" comes into being an issue in a Chapter 13.

Let's put it this way. Those that solely receive payments from SSA (SSDI, OASDI, SSI) would qualify for a Chapter 7 because those payments are not counted as income. Those same people would only choose a Chapter 13 (voluntarily) because they are trying to protect property. While the SSA payments would not be used to calculate the current monthly income (CMI) in that Chapter 13, those same payments would be used to calculate the disposable monthly income (DMI) for a Chapter 13.

So, unless you're filing a Chapter 13, you should not worry about SSA payments/income.