Chapter 7 and Social Security

[beezee]

In the means test of a chpt 7 BK SS income is not counted so we pass the means test. In regards to schedule I & J we have disposable income if you count the income from SS. Has anybody filed a chpt 7 and ran in to this situation if so, could you let us know what the trustee did if you forced in to a chapter 13, excess is $225.00 per mouth?

[AngelinaCatHub]

You paid for SS and it is an exempt item. You will probably not have a problem at all. We were an asset case and made it, you will too. $225 is nothing and the means test only give people a 'thumb nail' sketch of their situation. It is not hard and fast. 'Hub

[despritfreya]

Social Security, while exempt and not part of your "CMI" for means testing, is reflected in Schedule I. If, as a result of the SS, you have positive cash flow at the end of the month you could be facing a "totality of the circumstances" issue as it relates to a Motion to Dismiss under 707(b). You should consult with an attorney in Montana to see how your district handles this issue.

Des.

[Miknan]

We may be in the same situation here in Michigan. We don't pass the means but my wife applied for SS and our lawyer said the "disposable income" could force us into a 13. We had our 341 a month ago and are still waiting to hear something. Plus I have vacant land they may sell so I have no idea what and when something is going to happen. My lawyer said if my wife is denied SS (which is likely this first time), the trustee could keep the case open for the entire two years it will take us to appeal, although it is unlikely for that to happen.

[justbroke]

Yes, this is one of those "it depends" answers. It really depends on your District and the Trustee. An attorney practicing in that District would have more information about the specifics of how this is handled in that District. Sometimes, compassion means alot.

Additionally, I might try to find some more expenses to offset the $225 a bit. You only need to get below $182.50 for there to be no issues. So... you might find $42.50 in additional (allowable) expense to put on Schedule J.

[btbeme]

In the means test of a chpt 7 BK SS income is not counted so we pass the means test. In regards to schedule I & J we have disposable income if you count the income from SS. Has anybody filed a chpt 7 and ran in to this situation if so, could you let us know what the trustee did if you forced in to a chapter 13, excess is $225.00 per mouth?

It is easy to find another $50 or so per month in allowable expenses, which would put you under the limbo bar. For instance, if you had a lien against a vehicle you own which was being paid back at the rate of $50 a month, that would suffice. Or, if you used the IRS standard allowances for your expenses, that is usually fine. Etc. The value of a good attorney who knows the Trustee's picadillos is a good price to pay. And the initial consultation is usually free.