Tag Archives: social security

Social Security and Bankruptcy

Social Security income in bankruptcy should be a well-settled issue now in bankruptcy court.  Social Security benefits do not count as income.  Several US Circuit Courts of Appeals have held that the debtor does not have to use Social Security income to pay creditors during a chapter 13 plan.  Social Security income does not count as “projected disposable income”. I have filed several chapter 7 cases even though the debtor’s actual budget shows that he or she could make payments to creditors.   I have not received any objections until recently in one case.  The US Trustee claimed that the ability to pay was a basis to contest in a chapter 7 even though the ability was based on social security.  Ultimately, the US Trustee withdrew its motion to dismiss.  There remains a possibility the US Trustee could object in a future case.  There have been no rulings in the…
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