Tag Archives: miami chapter 7

Two United States Circuit Court of Appeals decisions in the last 10 days will be extremely helpful to debtors in chapter 13.   Congress when it rewrote the consumer bankruptcy laws in 2005 provided that social security income would not be included in the means test to determine whether an individual would qualify for chapter 7.  If a debtor had excess disposable income, the debtor would only be eligible for a chapter 13.  Congress determined that social security income would not count against the debtor as income. However, chapter 13 trustees typically contend that based on the chapter 13 statute that debtors must exercise good faith,  and that good faith requires individuals to use all available income.  Trustees argue that debtors who receive social security income must still include this amount as income thereby increasing the monthly chapter 13 payments.  It is true that debtors could afford to pay more based on…
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