Orlando, FL asked in Bankruptcy for Florida

Q: After chapter 13 bankruptcy payments begin, can trustee take VA disability income away?

I'm 74 years old. Chapter 13 payments began in July of last year, to save house and repay a certain percentage of unsecured debt, on 5-year plan. They take over half of fixed income from military retirement, SS, and pension plans. At the time I was only on 40% of VA disability, so no direct disability pay was ever received, just used to reduce tax burden on retirement pay. In March of this year, after further evaluation by VA doctors, I was granted 80% disability, which resulted in direct disability monthly payments of $1,767, which reduced military retirement by $68 a month, so a net gain of about $1,700 a month. Also expecting a lump sum payment for retroactive disability pay to go back to February of last year, which could be well over $20,000. Must I report this change in income to the bankruptcy trustee? How much of this disability pay could conceivably go to creditors? I'm in Florida, which has statutes that override most federal exemptions. Thank you for any advice.

Related Topics:
2 Lawyer Answers
Timothy Denison
Timothy Denison
Answered
  • Bankruptcy Lawyer
  • Louisville, KY

A: You must report it to the Trustee, but the Trustee cannot seize your disability income.

Bruce Alexander Minnick agrees with this answer

Stuart Nachbar
Stuart Nachbar
PREMIUM
Answered
  • Bankruptcy Lawyer
  • Livingston, NJ

A: A drastic change in circumstances warrant advising the trustee. It would not be part of your Current Monthly Income Test as it would be exempt. Trustee should not be able to seize or demand those funds.

Bruce Alexander Minnick agrees with this answer

Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.

The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.

Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.