If you Filed with SSDI when you passed means, but had disposable income...

[mom2crazies]

what happened??

I apologize if this is a redundant question. I did a search and couldn't find something specific to my question, so I figured I would post.

Anyway...

We passed the means test in order to file for a chapter 7 bankruptcy. However, our attorney is concerned that the trustee will move for a dismissal or conversion to a 13 based on our income on schedule I. This is only because I receive SSDI and so do my children. If not for the SSDI, this wouldn't be an issue at all. He said it will look like I have enough for a repayment plan when they see the SSDI income with the regular income that my husband makes. I do have separate accounts for our benefits that do not co-mingle with his account, but am not sure if that matters.

The laws are so contradictory. They say that it's exempt, but then you have to include it as income? I am just wondering if anybody has some experience with this type of situation or has been in my shoes.

It's not like I am against a 13, I just don't want my SSDI and my childrens SSDI to be factored in when they figure out a repayment plan. It doesn't seem right that they can take that money away.

I am mostly concerned about their income being protected because it pays for things like activities (dance, etc) and college.

[keepmine]

I'd suggest speaking with another couple of lawyers.
You can do a search here for a couple of posters named Floridian and Junker who passed the means test and SS was there only source of income but, had few expenses and showed enough MDI to land them in a 13.
How much MDI are you showing with the SSDI ?

[momofthree]

From what I understand from what I've read here on the forum (note I have no firsthand knowledge), SSDI is exempt as far as being an asset so it cannot be seized and distributed to creditors. However, it DOES count as income in determining whether you can fund a ch.13 plan.

That said, I'm not sure how your children's SSDI will come into play since they aren't the ones filing. However, you are counting them as household members, so if any of their income is used to pay household bills, then that money will probably be counted as income even if the rest doesn't count. If you keep their money separate and never touch it except to pay for their activities, then it may be safe. If you sometimes withdraw money to pay for household expenses though, it most likely will count as household income. AGAIN, I have NO firsthand knowledge of this and it is pure speculation based on what I've read on the forums.

A competent attorney will be able to provide this information for you. If you're unhappy with what one attorney says, then consult with a couple more.

[mom2crazies]

So, I just did the Utah Means test which included my SSDI and my childrens SSDI. It calculated that my disposable income was $1100, which can pay back 105% of the debt in 60 months. I am assuming they cannot make me pay more than 100% of the debt? I don't think this is realistic at all considering it just allowed me to claim my copays, and on average I have more than that in monthly medical payments.

[momofthree]

#1, you will not be forced to pay more than your debt. However, you will be responsible for trustee fees and attorney fees (if any are included in the plan).

#2, you can claim your full medical expense as long as you can show proof of it. IRS standards allow $60/person per month, anything more than that will require documentation, but it is allowable.

[Peeps]

Hi Mom2,
I just met with my attorney and his terrific (crazy and wicked-smart) paralegal yesterday and we covered the SSDI thing. I'm a solo-act so I don't know what would happen with children on SSDI but generally speaking I can say... yes your SSDI income will be counted on Schedule I. On the flipside, the trustee will be expecting to see much higher medical costs on schedule J. If you can show those exist, and they probably do, the two kind of go hand in hand. Just a little tip. Hope it helps.

[despritfreya]

See response here:

http://www.bkforum.com/showthread.php?67570-Should-we-fight-the-courts-to-get-a-chapter-7-because-of-my-SS

Please try to keep to one thread. It gets confusing.

Thanks.

Des.

[mom2crazies]

Sorry about that. My situation is so confusing and complicated that I was trying to figure out the appropriate forums to post the questions