Grand Rapids, MI asked in Bankruptcy for Michigan

Q: is social security counted as disposible income in a chapter 13 bankruptcy

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5 Lawyer Answers

Trent Harris

Answered
  • Bankruptcy Lawyer
  • Jackson, MI
  • Licensed in Michigan

A: For purposes of the Chapter 7 means test, Social Security benefits are not income. But for purposes of Chapter 13 disposable income, yes, Social Security benefits are counted as income from which your allowable expenses are subtracted to arrive at disposable income in Michigan. In some other jurisdictions (other than Michigan), the answer would be different.

As always, you get what you pay for. Be sure to talk to a qualified attorney about your specific situation before choosing to rely on any information you get from internet discussion boards, such as this one.

Bruce Alexander Minnick and David Luther Woodward agree with this answer

Stuart Nachbar

PREMIUM
Answered
  • Bankruptcy Lawyer
  • Livingston, NJ

A: Usually it is not included in CMI but that is a jurisdictional issue, so contact counsel in your state

Bruce Alexander Minnick agrees with this answer

Timothy Denison

Answered
  • Bankruptcy Lawyer
  • Louisville, KY

A: Yes. It is included in a Chapter 13 as disposable income.

Bruce Alexander Minnick agrees with this answer

Mark Bredow

Answered
  • Bankruptcy Lawyer
  • Bloomfield Hills, MI
  • Licensed in Michigan

A: Your question is very simple to ask, but very complicated to answer. The short answer is, you must include Social Security payments in your monthly budget on Schedule I. Your budgeted monthly living expenses will be deducted from your monthly income to determine how much your monthly plan payment will be. SS income is included in this calculation.

However, for your plan to be approved by the Court, you may be required to pay a minimum total amount of payments over the full length of your plan. This minimum total amount is your "Projected Disposable Income" (PDI). The Court will calculate your minimum PDI amount if your household income is above the median income for a family of your size. If your household income is below the median income, you will not be required to make a minimum total payment amount.

Social Security income is not included in determining your household income to determine if you are above median income or below median income.

Either way, your Social Security check will not be ignored when determining what your final monthly plan payment will be.

Bruce Alexander Minnick and David Luther Woodward agree with this answer

David Luther Woodward

Answered
  • Bankruptcy Lawyer
  • Pensacola, FL

A: I agree with my colleagues.

You do need competent counsel to do either a 7 or a 13, but particularly a 13.

Bruce Alexander Minnick agrees with this answer

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