WI - Does unemployment count as income on Means Test?

[youngnbroke]

Out of the last 5 months, my husband has only worked 2 months...but he also has a part time job, that with his UC and my income would put us over the median income (even though we only are left with $200 after all the bills are paid) so I'm PRAYING that the UC doesn't count. We should just make it as long as it doesn't. But I think I also read that even though we may be over on the median income, you can still file for Chapter 7? Is that correct? What are the stipulations to that?

[Faust]

It is included, we had to include it in our income for the 6mo look back.

Do you have atty yet? They are the ones who can give a good idea about what you are looking at as far as being over under the median and passing the means test.

Good luck to you!

[youngnbroke]

We haven't hired one yet, but we had a consultation with an attorney about a month ago. We were going to wait till the end of June so we could let the UC "work in our favor" but if it is included, then we're just wasting time!! UGHH!!! I suppose we should maybe go back to the attorney sooner and see what we can do.

But what about post left by SeattleBK?? See what I mean as to getting conflicting answers?! But maybe it varies state to state. Irritiating.

[SeattleBK]

YoungnBroke,

After further reading, I've learned that this issue has conflicting answers according to where you are from and even some attorneys are not necessary sure about it.

There have been three court cases:

Two say UC is not included:

"In 2007 the Court in the case of In re Sorrell, in the Southern District of Ohio, concluded that this compensation is a “benefit under the Social Security Act."

"The Bankruptcy Court of Massachusetts came next in the case of In re Munger, and sided with the Sorrell Court that unemployment compensation is a “benefit received under the Social Security Act” as provided by Section 101(10A)(B).11 This court relied much on the analysis of the Sorrell decision, but it added an analysis of the commentators who have addressed this issue."


The latest from Pennsylvania says it is:

"The Bankruptcy Court for the Middle District of Pennsylvania came after Sorrell and Munger, in 2008, and yet held that unemployment compensation is not a “benefit received under the Social Security Act;”
(n re Kucharz, 418 B.R. 635 (Bankr. C.D. Ill., Oct. 28, 2009).


In my case, as I said, I did not add it in, but I did include it on the form, and I had no issues. This was in February 2009.

I read that some attorneys will leave it out as I did and wait to see if the trustee says anything given there hasn't been a court case in that district.

I'm not sure what I would do if I had it to do all over again.

[youngnbroke]

You said you didn't add it in, but included it on the form - if you had included the UC as income, would that have put you over the median income? Without the UC we should be about $1500 under the median, but if we have to include it, it will put us over.

At the end of the day, all I'm concerned with is getting rid of ALL the debt so we can start over, I do not want to file 13, but if that's our only option, then we'll deal. Another question I have is as far as the DMI goes - is this the money left over after all the bills are paid (including the c.c.'s and mortgage we no longer intend to pay for?) I guess my actual question would be, how do we calculate our DMI - what's included and what's considered "disposable"

[SeattleBK]

If I had added it in, I still would have been well under the median income of 60K for my household size in my state.

That also could have been a factor in why the trustee didn't bother with my case.

As for the DMI, I was able to find this information which correlates with the information in my NOLO book

"to get a rough estimate of your disposable monthly income (DMI) take your six month average income and subtract all allowable expenses. Expenses can include: mortgage and rent, past due taxes, priority debt, secured debt and $1,500 in private school tuition. If the difference is more than $166.66 per month and $10,000 of the debt owed could be paid with in 5 years, you are required to file for Chapter 13 Bankruptcy. If not, additional calculations must be made."

[gmk]

I believe that the "UC is not included due to SS" approach for the means test is viewed at the district level.

In N Illinois UC is included at this time but I'm not sure if that view is supported by case law yet. Before doing anything I would want to know for sure. CH 13 from a 7 petition is a surprise I wouldn't want to have. I would ask your attorney and try to find out how it is handled in your specific district.