Q: Do you have to report social security benefits in Chapter 7 filing?

A: You do report Social security on schedule I and the means test but it does not count toward the means test result. Pension income gets reported on both and does count. Speak to an attorney to decide whether filing is beneficial.

A: Social Security benefits do not have to be included in your Means Test. These benefits should be listed in Schedule I (Income) of your bankruptcy petition, but the entire amount can be "backed out" on Schedule J (Expenses), as 42 USC 407 makes it clear that Social Security benefits have no application in bankruptcy cases.

A: Social Security Benefits are included monthly income in Schedule I but are excluded from the Means Test. The Means Test is the initial threshold for determining Chapter 7 qualification. Her pension would be included in the Means Test. Chapter 7 gives peace of mind to an elderly person who does not wish debt, and debt collectors, hanging over their head.

A: When filing for Chapter 7 bankruptcy in New York, it is necessary to report all sources of income, including Social Security benefits. This is crucial for providing a complete financial picture, even though Social Security income is generally protected from being claimed by creditors under federal law. Your mother will need to list these benefits on the bankruptcy forms, specifically on the schedule of income.

Despite this requirement, it's important to know that Social Security benefits are often exempt from the reach of creditors. This means that while they must be disclosed, they typically cannot be taken to pay off debts in a bankruptcy proceeding. It's a safeguard that helps ensure that essential income remains available for daily living expenses.

In your mother's case, where her income is solely from pension and Social Security, and she has no significant assets, her situation may indeed render her "judgment proof." This term suggests that even if creditors were to sue her, they would not be able to collect anything because her income sources are protected. Filing for bankruptcy could potentially eliminate her credit card debt and alleviate the stress of dealing with creditors, but it's important to weigh all the options carefully. Consulting with a bankruptcy attorney can provide guidance tailored to her specific circumstances, helping to navigate the process and decide the best course of action.