Question about VA disability and means test

[Morgon64]

My husband and I were dismissed from a Ch 13 after 4 years only b/c of bad advice from our attorney. We are now filing Ch 7 (with a NEW attorney) to deal with the $26,000 in unsecured debt that was left untouched during the Ch 13.

How exactly will the fact that the disability is exempt benefit us?

Is it simply not going to be figured as DMI for the purpose of our 12 monthly payments, whatever those turn out to be?

Also, how do they fugure out what your payment amounts are?

I know, should have asked while we were at the lawyers today but I forgot.

Thanks guys.

[mrskal]

Maybe I am not reading your question right, but there will be no payments in a CH7. Your debt gets wiped out.

[HHM]

2 issues,

1. As was pointed out, you don't make payments in chap 7 (unless you are reconciling non exempt assets).

2. VA income COUNTS for the means test. The only source of income that DOES NOT count is SSI and SSI.

[Morgon64]

Yes, I was talking about reconciling non exempt assets, I should have made that clearer, sorry.

How do they figure the payments? Do I need to pay back dollar for dollar what I am going to keep, or else sell the asset(s)? I don't have that much, btw.

[starr4law]

Well, VA income USUALLY counts. There is a situation where it doesn't. I don't have the rule right in front of me but I believe that if a disabled veteran's debts were largely incurred during active duty or homeland defense, then that person does not fill out the means test at all - they are wholly exempt from it.

Just a thought . . .

[Morgon64]

Well, VA income USUALLY counts. There is a situation where it doesn't. I don't have the rule right in front of me but I believe that if a disabled veteran's debts were largely incurred during active duty or homeland defense, then that person does not fill out the means test at all - they are wholly exempt from it.

Just a thought . . .

Actually, I just found where we are exempt from means test b/c husband is National Guard and is less than 540 days post redeployment (coming home) from Iraq.

I'm just concerned b/c he JUST got awarded the VA stuff, and it comes perilously close to putting us over the median income. Otherwise we were home free.

Thanks

[angles]

2 issues,

1. As was pointed out, you don't make payments in chap 7 (unless you are reconciling non exempt assets).

2. VA income COUNTS for the means test. The only source of income that DOES Not count is SSI and SSI.

I would have thought VA income would be exempt since it is viewed similar to retirement money? Perhaps I am confusing collection practices vs BK. So for clarification, in collections (after a judgment) the collector can only take from non-retirement payments but if someone files for BK then all income (with exception of SSI) is included?

That being the case, if a person is living off of retirement income and have no appreciable assets (paid off house for example) they are basically collection prof and there would be no reason to file for BK.

[starr4law]

Morgon - if you don't have to do the means test, they why would you worry about the median income guidelines? Am I missing something?

[Morgon64]

Morgon - if you don't have to do the means test, they why would you worry about the median income guidelines? Am I missing something?

I just happened to find that exemption on my travels around the internet AFTER I posted the question. However, I'm only of the understanding that that exempts us from the means test, I was assuming that didn't apply to the median income thing.

Not sure if you read the last thing I wrote, which is that I WAS checking into the means test (now I know I don't have to) just in case we are over the median. I'm worried about being over the median because of the VA benefit, which we just started getting.

If we are exempt from the means test, does that naturally follow that we are also exempt from having to be under the median?

[starr4law]

Yep. However, you still need to pass your Sch I/J and have enough exemptions to cover what you have in checking and savings. You should be golden

[Morgon64]

Yep. However, you still need to pass your Sch I/J and have enough exemptions to cover what you have in checking and savings. You should be golden

Thanks for the time and info