Unemployment Question

[Lolabeagle]

Hi Everyone -

Here is my deal...I am in Michigan, got laid off in May. I am SO confused on this unemployment counting as income or not. I thought unemployment was exempt, so would any of that money go into funding a chapter 13 if I were forced into it? We would be under the median with just my husbands earnings, over if you include my unemployment. My husband spoke to an attorney, and swears up and down that she said it could not be counted - but from everything I am reading here it is the opposite. Anyway, for now I am collection proof, no bank account, home in foreclosure, only unemployment as income so I am thinking we should wait until the unemployment runs out. Anyone have any experience with this?

[MSbklawyer]

Hi Everyone -

Here is my deal...I am in Michigan, got laid off in May. I am SO confused on this unemployment counting as income or not. I thought unemployment was exempt, so would any of that money go into funding a chapter 13 if I were forced into it? We would be under the median with just my husbands earnings, over if you include my unemployment. My husband spoke to an attorney, and swears up and down that she said it could not be counted - but from everything I am reading here it is the opposite. Anyway, for now I am collection proof, no bank account, home in foreclosure, only unemployment as income so I am thinking we should wait until the unemployment runs out. Anyone have any experience with this?

It's one of those gray areas in the law, Lola. Different courts have been deciding it different ways. The code says that "current monthly income excludes benefits recieved under the Social Security Act" and unemployment compensation is part of the Social Security Act. Some courts have held that this means any payments under the Social Security Act, including unemployment. Others have found to the contrary, holding that it means only traditional Social Security payments. I don't know how Michigan has come down on it. Someone here may know. But tell me which district you're in in Michigan and I'll look it up.

[Lolabeagle]

I believe that would be the western district - in GR.

[MSbklawyer]

There are no cases on the issue out of Michigan -- at least none that I found. There are none at the 6th Circuit level. However, the leading case on the question comes out of Ohio which is also in the 6th Circuit: In Re Sorell, 359 B.R. 167.

It says that "[U]nemployment compensation is one of the benefits under the Social Security Act and . . . is correctly excluded from Current Montly Income."

PM me an email address and I'll send you the case.

[backtoschool]

In the eastern district of Michigan unemployment insurance is counted as income.

I am pretty sure this is true in the western district as well.

[freakedout]

I'm in the western district and haven't filed yet but retained an attorney. He is counting my unemployment as income unfortunately. If we didn't have to count it, we would be under the median.

[Lolabeagle]

So are you going to have to pay any of your unemployment into a chapter 13, or is that considered exempt?

[Crawf]

Any idea what district in Ohio that case law is in?

Thanks

[Heli]

My unemployment is from the Railroad Unemployment Insurance Act which is seperate from the Social Security Act so I guess that will get counted as income.

[HakunaMatata]

Did the attorney look at your expenses or run the Means Test? There are numerous above-median C7 filers.

Here is an online Means Test which may offer better insight (I found this advantageous when discussing my situation with consult attorneys):

http://www.legalconsumer.com/bankruptcy/bankruptcy-means-test.php?ZIP=49504&ST=MI&CBSA=24340&FEDCT=MIW&CITY=Grand%20Rapids&METRO=Grand%20Rapids-Wyoming,%20MI