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Child Support Income and Bankruptcy

Child support income in bankruptcy can raise some tricky issues.  I recently posted a blog on social security and bankruptcy, and there are some related issues.  A recent case may help debtors in chapter 13 not to have to use their child support income. Child support income is included in the chapter 7 means test (unlike social security).  The child support income, together perhaps with other income, might show that the debtor is not eligible for chapter 7 (there is a presumption of abuse).  However, in chapter 13, child support income is deducted from the total income.  This could actually show that the chapter 13 means test would show that no payments are required in the chapter 13 though the chapter 7 means test would require a chapter 13. Bankruptcy attorneys must evaluate not only the means test income, but what I call the “real budget” as reflected on Schedule…
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