Can the trustee still take payments out of a disability check.

[deedee642]

Hi,
I have a question that I hope someone can help me with. I filed a Chapter 13 - 100% payback bankruptcy in November, 2012. I am going to be leaving my job and going off work on what my school district calls an Early Disability Retirement. In addition to the disability checck from my Employee Trust Fund, I have a supplemental disability insurance policy that will be making disability payments to me for the next two years.
Is this money mine, or will it be used to continue to pay back my creditors?

The thing is, that I also had a lot of accumulated sick time. I actually still have about 70 days left (It is a long story but we were originally promised 1 year paid health care upon retirement (age 60) if we saved 100 days) so I never used my sick time. Now my district has taken that off the table, so I have been using all my hours up. However, with the 100% payback it is like getting 1/2 check. So, if they can't touch the disability, I would be willing to leave the sick time on the table and start the disabilty A.S.A.P. This is not like S.S.D.I. but it is a Disability Distrubition. I have been told that the two doctors statements that I submitted were "qualifying statements". So, I am confident that this is going to work out for me. I just need to provide them with "a last day of employment" which is dependent upon whether or not I use the accured sick time.

I want to thank you in advance for any assistance. I hesitate to talk to my attorney, because their fees are being paid from the 100% payback and I don't trust that they will give me any advice that would stop their payments coming in.

Thanks,
Dee

[LadyInTheRed]

Is your income decreasing or increasing? It's hard to tell form your post. Will you still be able to make your plan payments?

If your income is decreasing and you can't make your plan payment, you need to talk to an attorney about modifying your plan.

If your income is increasing, let your attorney know about it so it can be reported to the trustee if necessary. It shouldn't cost you much for your attorney to tell you whether an income increase needs to be reported. It's better to spend a little on attorney fees than to get into trouble later for not reporting income that should be reported. It's possible your payment will increase to take into account any increase in DMI. If it does, your plan will end earlier.

ETA: The answer to your question will not determine whether your attorney will continue to receive payment of his fees through the plan. Also, for your attorney to receive more from the plan than originally included, he would need to file an additional claim for the additional fee. Besides, your attorney would be risking his reputation and license to practice law by giving you advice that is inconsistent with your best interests. It's hardly worth the risk and he knows that.

[forgotten]

Yes, your disability payments are income. They will be calculated in with your payment amount if you continue the CH13.
As LIR mentioned, your lawyer is not going to give you bad advise because of any fees they are getting. It is likely your attorney was paid in full out of your first few payments anyway (unless your payment is too low to have paid them yet).

[deedee642]

Forgotten & Lady in Red,
Thanks for the posts. My income will be less; however, I've been paying into a personal supplemental disability policy which will bump up the disability amount.
Dee