CHAPTER 13 AND DISPOSABLE INCOME

[PATRICK PROPER]

IN NEW YORK [EDNY] CAN SOCIAL SECURITY INCOME BE
EXCLUDED FROM CHAPTER 13 PLAN PAYMENTS
OR MUST IT BE INCLUDED IN THE PLAN?

 

[justalayman]

you must report it as income on your schedule I

 

[despritfreya]

In most (maybe all - not sure) districts a debtor may use SS to support the feasibility of a Plan, however, such is not required.

With a few exceptions, 11 USC 1325(b)(2) utilizes your "current monthly income" in determining what your "disposable income" is for Plan funding purposes. CMI does not include SS therefore, in theory, neither does DI for Chapter 13. Many decisions follow this thought process but I am sure there are a few that do not. I did find one decision from the Northern District of NY that follows the majority position:

“In light of the BAPCPA amendments, it is settled law that, for individuals seeking bankruptcy relief, SSI enjoys complete protection from the reach of unsecured creditors.” In re Bartelini, 434 B.R. 285, 297 (Bankr. N.D.N.Y., 2010) The Bartelini case was a consolidated ruling for several Chapter 13 cases where the debtors included some but not all of their SS income to support the Plan. The Trustee objected. The judge overruled the objections.

Here is a link to the decision. Please note - I do not know if the decision was appealed, if the holding is followed in all NY districts or if there is Circuit Court decision that settles the question.

https://www.courtlistener.com/opinion/2196393/in-re-bartelini/
You need to consult with a local attny to determine if SS must be listed on Schedule I. That attorney should also know if the income must be used to fund the Plan.

Des.