Announcement

Collapse

Forum Rules (Everyone Must Read!!!) (updated: 04/28/2015)

Welcome to the Bankruptcy Forum. Bankruptcy (BK) Forum is known as BKForum.com and will be referred to as BKF hereinafter. In order to ensure a long term success of our vibrant community, we have established certain rules and guidelines to which everyone must adhere to. Please take your time to carefully read our rules, before you start to participate in the community.

Things you agree to do:
BKFORUM.com (BKF) users agree to use the search function before starting a new thread. This prevents duplicate discussions and allows for better organized topics.

All BKF users agree to read the sticky posts which may be available at the top of a forum page. These Sticky posts often contain valuable information. They may also outline more rules and guidelines specific for that particular forum, stickies are put in place by that forums moderator(s) or admin(s).

Things you agree not to do:

All BKF users agree not to call people names or write a post simply to make a personal attack, or get a negative reaction; this behavior is not allowed on our forum. The use of derogatory language aimed at anyone will be severely dealt with. There is no need to agree with each other, or to even like each other. However, by signing onto BKForum.com you agree to treat each member and guest with the respect they deserve. No threats or personal attacks will be allowed.

All BKF users agree not to discuss, engage, or encourage any behavior or activity which violates the law. Discussion of drugs, violence, murder, theft, vandalism, fraud or any other issue which could be used to help individuals break the law is strictly forbidden.

All BKF users agree not to "bump" old threads, unless there is a specific benefit to the community by doing so. But in most cases, please don't post in very old threads, instead start new threads.

All BKF users agree not to attempt/use another members account. It is against BKF rules to use any account other than your own. Impersonating another member will result in an immediate ban. It is also against the rules to open more than one account in your own name without permission from a moderator or administrator. If you have been banned for any reason, it is against the rules to open another account. If you were banned temporarily and you are caught using another account you will be banned permanently. Choosing a moniker which is similar in either sound or spelling as a moderator or administrator is strictly forbidden.

All BKF users agree not to private message any moderator, admin, or other member with questions related to their personal circumstances (Questions about the forum or issues with the forum are ok). This forum only works when members share their experience and insights with everyone.

Things you agree not to post:
All BKF users agree not to post any derogatory/racist/or sexist remarks. This includes attachments, links and all information contained within posts, signatures, and avatars, failure to comply with this rule will result in a permanent ban.

All BKF users agree not to post any copyrighted or trademarked information without the express written permission of the owner(s) / proper citation of source.

All BKF users agree not to post any real names, addresses, telephone numbers, email addresses, social security numbers, or any other personal details (their own or other people's).

All BKF users agree not to post links, pictures, attachments, videos, or the like of pornographic content, objectionable material or extreme violence, whether cartoon or real.

All BKF users agree not to use BKF for advertising purposes without a written contract between yourself/company/agent and the administration of BKF. Blatant advertising will result in a ban.

All BKF users agree not to spam the forums. Spam includes but is not limited to posting erroneous, non-relevant-useless, off-topic, or meaningless posts. Spam may also include posts which contain no text, or large areas of blank space between lines. Simply posting emoticons without text is considered spam. BKF is the largest bankruptcy message board and all the content is intended to help other users. Please help us improve the quality of our forum by making sure that your posts are well-worded, spell checked, grammatically correct and syntaxed.

Regarding actions of moderators and administrators:

The forum is no place to air out your opinion or be judgmental of our staff and its capabilities.

All BKF users agree not to abuse or mistreat moderators or administrators. It is against BKF rules to post any information regarding bans or any other action taken by a member of the moderating or administrative team. If you wish to discuss bans or warnings please do so via PM. To place a complaint against a moderator, send a PM to a super moderator. All Moderators are equal, any decision made by a moderator must be adhered to. If a moderator tells you something you do not like, do not go to another moderator looking for a different answer. If you are caught doing this you will be banned. The moderators work as a team and respect the decisions made by their peers and will help enforce them unless an administrator tells them differently.
If you have an issue with how the forum is run, then notify one of our administrator and we will look into the situation. We have in the past and still do appreciate any input that you offer this forum. But critical input and/or judgmental postings towards the staff will result in you getting banned.


Should you find a thread offensive or out of line, then notify a Mod in a PM so they can evaluate the situation and do the action deemed necessary.

All moderators do have active "other" lives outside of the forum and help moderate this forum in their spare time throughout the days and weeks.

If you have a problem with a member or Mod follow the proper channels of reporting it.

BKF reserves the right to delete any posts which contain anti-BKF comments or discussion. Any bashing of moderators or administrators, or any of their discussion or actions will also be deleted, and the responsible posting party(s) will be banned. Any public anti-BKF advertising, communication, or posts on another forum will result in permanent bans as well.

All warnings and bans are decided by individual moderators and administrators. Warnings are preferable to bans however, for serious offenses and repeat abusers bans will go into effect. The length of the bans can vary from several hours to permanent.

All messages posted or sent including through PM are the property of BKforum.com.

All BKF users agree not to advertiser on the forum (Niether by posting, private messaging or using your signature). If you are a company/attorney/legal adviser wishing to advertise on the site or sell a product, you must contact the head administrator and inquire about our advertising packages.

All bankruptcy related opinions expressed on BKForum.com are those of their authors and not necessarily of BKF, its staff or representatives.

You agree not to copy any material/post/content from BKF without written permission from our head administrator .

By posting on this forum you agree to these terms and conditions, including any punishment deemed appropriate by moderators or administrators in the event of an offense.

Administrators/Moderators can change these rules at any time without prior notice.
See more
See less

Info compiled regarding SS and bankruptcy

Collapse
X
  • Filter
  • Time
  • Show
Clear All
new posts

  • Info compiled regarding SS and bankruptcy

    This is what I have found so far regarding Social Security and Bankruptcy based on my own research. It may or may not help you (these are based on MY opinions and interpretation):

    Social Security Act : Sec. 207. [42 U.S.C. 407]

    (a) The right of any person to any future payment under this title shall not be transferable or assignable, at law or in equity, and none of the moneys paid or payable or rights existing under this title shall be subject to execution, levy, attachment, garnishment, or other legal process, or to the operation of any bankruptcy or insolvency law.(b) No other provision of law, enacted before, on, or after the date of the enactment of this section[97], may be construed to limit, supersede, or otherwise modify the provisions of this section except to the extent that it does so by express reference to this section.

    (c) Nothing in this section shall be construed to prohibit withholding taxes from any benefit under this title, if such withholding is done pursuant to a request made in accordance with section 3402(p)(1) of the Internal Revenue Code of 1986[98] by the person entitled to such benefit or such person's representative payee.


    If you think about it, it doesn't make sense that the benefits are not subject to execution by creditors, but can be used to help pay back debt in a chapter 13 plan. Therefore, if you look at it in respect to that, they really are being used in execution for a creditor. hmmm....

    Form B22A (means-test) line 10 "Do not include any benefits received under the Social Security Act"

    USC title 11 chap1 § 101 (10A)(B)

    10A) The term "current monthly income"--

    (A) means the average monthly income from all sources that the debtor receives (or in a joint case the debtor and the debtor's spouse receive) without regard to whether such income is taxable income, derived during the 6-month period ending on--

    (i) the last day of the calendar month immediately preceding the date of the commencement of the case if the debtor files the schedule of current income required by section 521(a)(1)(B)(ii); or

    (ii) the date on which current income is determined by the court for purposes of this title if the debtor does not file the schedule of current income required by section 521(a)(1)(B)(ii); and

    (B) includes any amount paid by any entity other than the debtor (or in a joint case the debtor and the debtor's spouse), on a regular basis for the household expenses of the debtor or the debtor's dependents (and in a joint case the debtor's spouse if not otherwise a dependent), but excludes benefits received under the Social Security Act, payments to victims of war crimes or crimes against humanity on account of their status as victims of such crimes, and payments to victims of international terrorism (as defined in section 2331 of title 18) or domestic terrorism (as defined in section 2331 of title 18) on account of their status as victims of such terrorism.

    And...

    USC title 11 Chap 13 § 1325 (b)(2)

    the term “disposable income” means current monthly income received by the debtor (other than child support payments, foster care payments, or disability payments for a dependent child made in accordance with applicable nonbankruptcy law to the extent reasonably necessary to be expended for such child)

    One of the arguments that I found was stating that CMI is used to determine the payback in a 13, but SS is excluded from CMI according to:


    § 707(b)(2)(A) and (B)


    (iv) The presumption of abuse may only be rebutted if the additional expenses or adjustments to income referred to in clause (i) cause the product of the debtor's current monthly income reduced by the amounts determined under clauses (ii), (iii), and (iv) of subparagraph (A) when multiplied by 60 to be less than the lesser of--

    Doesn't this show that by stating that the presumption of abuse can only be rebutted if the CMI is too high? It looks to me that the CMI as explained in both USC title 11 Chap 13 § 1325 (b)(2) and USC title 11 chap1 § 101 (10A)(B) does NOT include disability. Which would mean that they could not use the presumption of abuse to push us into a 13.


    Also, I found this memo (based on a Utah case, where I am) which could be an argument against our case, but there are a few things that actually might help us:

    http://www.utahbankruptcyhotline.org...re-Cranmer.pdf

    I noted the following that may or may not help:

    The trustee orginally objected because although the debtor did not include SSI as income, but he used it as an expense.
    (I wonder if we added it in and then exempted it out, if that would help) Also, I think the judge was more critical because in the case, it is clear that they were amending things to "hide" the SS.


    Page 3:
    The Debtor also argues that previous decisions which included SSI as part
    of § 1325(b)(2) “disposable income” did so based on the voluntary filing of a chapter 13;


    **You can argue that it is always voluntarily because you make the choice to convert to a 13, rather than dismiss a 7 - BUT, you can also argue that there was no other option but to file a 13 (see the 8th circuit case)**

    Page 6:
    There is no dispute that SSI is statutorily excluded from both the calculation of CMI
    under § 101(10A) and the calculation of DI under § 1325(b)(2) as both calculations are
    determined by using Form 22C
    . However, the Tenth Circuit Court of Appeals (“Tenth Circuit”) in In re Lanning7determined that CMI and DI calculations are different than the calculation of

    PDI found in § 1325(b)(1)(B)8

    Page 9:
    In Re Koch - The Court concluded that the exempt income should also be included in the substantial abuse determination because “Congress is free to limit chapter 7
    protection to truly needy debtors who cannot fund a chapter 13 plan with exempt and non-exempt income.”26

    (sites ID at 1290) How can this be used to supercede any of the existing statutes, especially the Social Security act? Also, what is the definition of non-exempt in this? Couldn't that be interpreted as too broad? I would think that they would have needed to include SS in this statement by name because they would have to "supercede" the SS act in order to make this statement true. Aren't there several types of "exempt" income, that don't have the protection of the SS act?

    Page 10:

    There are some post-BAPCPA cases which have taken the view that SSI should be excluded from PDI based on the definition of DI from § 101(10A).31


    See In re Wilson, 397 B.R. 299, 319 (Bankr. M.D.N.C. 2008) (social security income of
    the Debtor’s non-filing spouse will not be included in the determination of the Debtor’s income for purposes of Section 1325(b)(1)(B)). In re Upton, 363 B.R. 528, 535 (Bankr. S.D.Ohio 2007)(consideration of benefits received under the Social Security Act is inappropriate for determining projected disposable income). In re Ward, 357 B.R. 741, 745 (Bankr. W.D.Mo.2007)(the debtor is correct that her social security income is not required to be included in theanalysis of whether she is contributing all of her projected disposable income to her plan but social security income must be included on Schedule I so parties can consider whether plan is filed in good faith). But see In re Calhoun, 396 B.R. 270, 276 (Bankr. D.S.C. 2008)(in § 707(b)(3) context, it is not proper to report and subtract social security income to shield from creditors because Congress knew how to exclude benefits when writing BAPCPA).

    Page 12:
    Here, even with the exclusion of SSI on Form 22C, the Debtor is an above median
    income debtor as his CMI is above Utah’s median income for a family of two
    (we are still below median income with the exclusion)

    Page 15:

    The Debtor voluntarily filed for chapter 13 bankruptcy relief and the Debtor is seeking to have the benefit of a bankruptcy discharge but does not want to have the burden of complying with the requirements needed to obtain that discharge. Bankruptcy, although provided for in the Constitution, is a legislatively created benefit, not a right and Congress may alter and withhold that benefit at its discretion. As stated by the KochCourt “Congress is free to limit chapter 7 protection to truly needy debtors” which appears to be one of the driving purposes of BAPCPA. A debtor has no constitutional or “fundamental” right o a discharge in bankruptcy.Therefore, by voluntarily filing a chapter 13, the Court concludes the Debtor is volunteering his SSI in PDI just as other debtors did pre-BAPCPA.

    I also noticed the judge used § 707(b)(3) as an argument for A and B (below), but in § 707(b)(2)(A) and (B) it references CMI, which does not include SS, which I think would exclude SS in the argument for totality. Again, this should not be the case because a presumption of abuse is supposedly regarding CMI. Which, again SS is not included in.

    "In considering under paragraph (1) whether the granting of relief would be an abuse of the provisions of this chapter in a case in which the presumption in subparagraph (A)(I) of such paragraph does not arise or is rebutted the court shall consider - (A)whether the debtor filed the petition in bad faith; or (B) the totality of the circumstances... of the debtor’s financial situation demonstrates abuse."

    There is also this case:

    According to the Eighth Circuit Bankruptcy Appellate Panel, a bankruptcy debtor cannot lose social security benefit payments in a bankruptcy case, even the money is paid as a $17,165 lump sum for past benefits. In re Carpenter, No. 08-6046 (8th Cir. BAP July 13, 2009), held that section 407 of the Social Security Act excludes such payments from the bankruptcy estate. Under the logic of this decision, social security payments of any kind are excluded from the bankruptcy estate in either chapter 7 or chapter 13 cases, and the debtor can keep this money without even needing to claim it as exempt.
    The debtor in Carpenter had received $17,165 as a retroactive social security disability benefit. He placed the funds in a segregated bank account and later converted the money into a cashier's check. Several months after receiving the money he filed chapter 7. The bankruptcy court ordered him to turn the social security money over to the trustee, but the appeals court reversed, holding that section 407 specifically overrode any bankruptcy statute suggesting that such funds belonged to the trustee.
    Under this decision, it doesn't matter what state the bankruptcy is filed in, because the funds don't have to be claimed as exempt. The fact that the funds are from social security excludes them from the reach of any bankruptcy trustee.It is important to note that section 707(b)(2) of the bankruptcy law (the means test), as well as section 1325(b)(2), exclude social security payments from consideration in a debtors budget in either chapter 7 or chapter 13. This means that social security benefits ought to be excluded from consideration in any consumer bankruptcy case, whether as an asset of the estate, or as income for the chapter 7 means test, or as income for funding a chapter 13 plan. It even should excluded from consideration for section 707(b)(3) motions, where the U.S. Trustee attempts to force debtors to convert to chapter 13, since the money can't be used for creditors anyways under section 1325(b)(2).
    In re Carpenter is an important reminder that courts should exclude social security payments from consideration in any consumer bankruptcy case.

    I found the case here:

    http://www.mow.uscourts.gov/bankrupt...ap/086046P.pdf

    I will be posting any information that I think is helpful as my case progresses

    Let's give a big round of applause for congress for once again confusing us!!
    Jen
    "...and how is it that bankruptcy is considered an "easy" way out by some???"

  • #2
    Thank you very much, Mom2. I think the inclusion / exclusion of social security income on Schedule I is going to be the next big bk issue to reach the Supreme Court. I haven't had to brief this issue (yet), but I am going to save your post to my research file because I know that day is coming.
    Pay no attention to anything I post. I graduated last in my class from a fly-by-night law school that no longer exists; I never studied or went to class; and I only post on internet forums when I'm too drunk to crawl away from the computer.

    Comment


    • #3
      Thanks. I hope it helps.

      Hopefully, it will get sorted out. I just don't want to be the one to have to pay for it by being the example!

      Newbie just pointed this out to me in one of my other threads:

      The case is Baud vs Carroll in the Eastern District of Michigan, with the appeal being decided at the 6th Circuit level.


      An excerpt: III. CONCLUSION
      To summarize, we hold: (1) if the trustee or the holder of an allowed unsecured
      claim objects to confirmation of a Chapter 13 plan of a debtor with positive projected
      disposable income, the plan cannot be confirmed unless it provides that all of the
      debtor’s projected disposable income to be received in the applicable commitment period
      will be applied to make payments over a duration equal to the applicable commitment
      period set forth in § 1325(b); (2) the calculation of a debtor’s projected disposable
      income (a) must exclude income—such as benefits received under the Social Security
      Act—that are excluded from the definition of currently monthly income set forth in
      § 101(10A) and (b) must deduct “amounts reasonably necessary to be expended” as
      defined in § 1325(b)(3) which, for an above-median-income debtor, means that the
      debtor’s average monthly payments on account of secured debts calculated pursuant to
      § 707(b)(2)(A)(iii) must be subtracted if the debtor intends as of the date of confirmation
      to continue making those payments; and (3) there is no exception to the temporal
      requirement set forth in § 1325(b)(1) for debtors with zero or negative projected
      disposable income. For the reasons stated above, we AFFIRM in part and REVERSE
      in part the district court’s opinion and order, and REMAND the case to the district court
      with instructions to remand to the bankruptcy court for further proceedings consistent
      with this opinion.
      Jen
      "...and how is it that bankruptcy is considered an "easy" way out by some???"

      Comment


      • #4
        Here are some other cases as well:

        In re Welsh (2010) - Bankruptcy court for district of Montana (criticizes Cranmer)
        In re Timothy (2009)
        In re Thomas ( 2010)

        I have the actual memos if needed
        Jen
        "...and how is it that bankruptcy is considered an "easy" way out by some???"

        Comment


        • #5
          Originally posted by mom2crazies View Post
          Hopefully, it will get sorted out. I just don't want to be the one to have to pay for it by being the example!
          You said in the other thread that your attorney is very confident. He may be willing to do it pro-bono if he is confident he can win. Taking a case to the Supreme Court and winning is good for an attorney's carreer! Of course, you would pay in non-financial ways too because it could draw out your case for years. Ever aspire to fame? If you get to the Supreme Court, win or lose, legal articles, practice guides and BK attorneys every where will cite the "mom2crazies decision" for years.
          LadyInTheRed is in the black!
          Filed Chap 13 April 2010. Discharged May 2015.
          $143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!

          Comment


          • #6
            Originally posted by LadyInTheRed View Post
            You said in the other thread that your attorney is very confident. He may be willing to do it pro-bono if he is confident he can win. Taking a case to the Supreme Court and winning is good for an attorney's carreer! Of course, you would pay in non-financial ways too because it could draw out your case for years. Ever aspire to fame? If you get to the Supreme Court, win or lose, legal articles, practice guides and BK attorneys every where will cite the "mom2crazies decision" for years.
            In an earlier post (different thread started by OP), I warned OP that tilting at windmills will take in excess of the 36 months it will take to complete a Chapter 13 Plan. Even if the attny does it at no cost, OP needs to think long and hard about being a test case.

            The reality:

            1. Even if you decide to file for a Writ of Cert, out of the approximate 20K that are filed annually, a whopping 20 or so are granted.

            2. Unless OP's attorney is admitted to practice in front of the Supremes, he/she is going to have to find suitable counsel to handle the case - even at the Writ level. Of course, if he/she is admitted to practice at that level such is not an issue.

            It is very expensive to take a case to the USSC. I can tell you from experience that there are attorneys who will take cases pro bono with the understanding that if successful, they will attempt to secure payment from the losing party. I can also tell you that it could take years to get there and the final outcome might just be a remand back down the chain for further determination. Remember the chain up is bk ct, BAP or District Court (unless a direct appeal is properly requested and granted) and then the Court of Appeals. If the case gets to the USSC and the C of A is reversed, it may be simply remanded back down the chain (from Court to Court) for further findings. Remand alone can take more than 1 year.

            My Firm has had one case go to the Supremes (shockingly Cert was granted) and it only went because we were approached by a seasoned Supreme Court attorney who wanted it (pro bono) as a companion case to his. The C of A decision, which was against us, was reversed and remanded for further findings. It took an additional 1.5 years to work its way back down the chain to a final conclusion.

            Choose what windmills you want to tilt at very carefully.

            Des.

            Comment


            • #7
              Des -

              We decided that we would file for the 7, and defend our case in the event that the trustee objected. If they still made us convert to a 13 (I know, I know..A 13 is always voluntary...but, you know what I mean) then we would defend our payment plan and be prepared for whatever happens. I would love to continue fighting if we needed to and help other people in what I consider an unfair and abusive situation by the courts, but the reality is that I live in UT, I have already seen how the courts act towards debtors and have seen how they don't even seem to hear their side. The fact of the matter is that we need to suffer our consequences and just hope that we have a decent trustee and judge. Wasn't it you that told me that since we passed the means test (without my SSDI) for the 7, that we would only be required to pay a payment plan in a 13 for 36 months?

              I wish I felt more positively towards our justice system, right now.
              Jen
              "...and how is it that bankruptcy is considered an "easy" way out by some???"

              Comment


              • #8
                Originally posted by mom2crazies View Post
                Des - Wasn't it you that told me that since we passed the means test (without my SSDI) for the 7, that we would only be required to pay a payment plan in a 13 for 36 months?
                It is not that you "passed means testing" it is that you are "below median income filers". If you are below median income filers your "commitment period" is 3 years (36 months).

                Des.

                Comment


                • #9
                  Does this mean that my payments can increase because it's a shorter term? Or, do the payments stay the same as they would in a 5 year plan?
                  Jen
                  "...and how is it that bankruptcy is considered an "easy" way out by some???"

                  Comment


                  • #10
                    Originally posted by mom2crazies View Post
                    Does this mean that my payments can increase because it's a shorter term? Or, do the payments stay the same as they would in a 5 year plan?
                    You pay what you are required to pay under law which is based upon 1)what you can afford to pay and 2) the amount you have to pay for (those items that apply to you) secured items such as a vehicle, attorney's fees, taxes, the Trustee's fee etc.

                    Hope that explains it.

                    Des.

                    Comment


                    • #11
                      Ok, I think I get it. I usually process and type at the same time, so sometimes after I post it, the answer comes to me. I think I was just thinking of if they determined that you would pay 100% in a 5 year plan, if they would still hold you to the 100% in the 13 plan, but then I realized that they couldn't take any more than the disposable income available monthly anyway. duh!
                      Jen
                      "...and how is it that bankruptcy is considered an "easy" way out by some???"

                      Comment


                      • #12
                        Here is some new information that might help some of you. I talked to the SS office today and the rep gave me this link:

                        https://secure.ssa.gov/apps10/poms.nsf/lnx/0202410005

                        To explain: The rep told me that the trustee cannot order that your SS funds be diverted to fund a ch. 13. If the trustee submits an order to divert the funds to the SS office, the SS office has to forward it to a regional office, so it can be responded to but it will NOT be honored.

                        My interpretation is that this is is the basically the same thing that happens if creditors try to garnish your SS.

                        Logically, I take it to mean (and argue) that if you have SS and Salary income, such as my husband and I, you could really only pay what portion you could pay off of the salary income that would be considered disposable. The trustee cannot take any of the SS income and I would think that the IRS exemptions would still apply to the salary income that would be used. I'm not a lawyer, though.
                        Jen
                        "...and how is it that bankruptcy is considered an "easy" way out by some???"

                        Comment

                        Unconfigured Ad Widget

                        Collapse
                        Working...
                        X