effects of unemployment insurance.....

[CPO]

Greetings all,

For those in the know.....

Explain the effects of unemployment insurance on the median income hurdle....this for BK7....

If I do not collect unemployment, I would be under the median income very shortly, living off my military pension and disability. Not much money, but I can still pay for my home, eat noodles and hunker down....

If I collect unemployment (at the maximum rate available which they claim I'm qualified for), I won't be even be close to paying my creditors but I would be able to job search far more effectively.

It would take longer to quailfy for a BK7 (no abuse check) though.

I'm assuming the trustee would include umemployment in the income calculations...in fact I believe its on the worksheet....

What's your advice/ experience on this?

If I petition for BK7 and unemployment insurance takes me over the median income, is this grounds for assuming abuse?

Thanks again,

CPO

[lrprn]

Explain the effects of unemployment insurance on the median income hurdle....this for BK7....

According to the reliable Nolo website, "Social Security and unemployment compensation don't count as income. For purposes of the means test, your monthly income does not include payments you receive from Social Security or unemployment benefits." (See http://www.nolo.com/article.cfm/pg/2...3/161/128/ART/ )

Do confirm this with 2-3 local bk lawyers during your free consultations, CPO, but if your unemployment benefit $$ are all that's keeping you from filing, looks like you'll be able to file sooner than you thought!

[CPO]

Thanks Irprn,

That's a great link in the NOLO site.....

I find it interesting that in the NOLO book, "How to File for Chapter 7 Bankruptcy," page 19 has a work sheet that includes unemployment compensation in the monthly income calculation....

On page 18 it states "you should include all of the following types of income on the form........'unemployment compensation.'"

And, I don't see on any petition form where it is subtracted.....

And yet, on page 20 in the upper left hand grey "data" box it states "Your current monthly income includes income from all sources, except: payments you receive under the Social Security Act........(and possibly state unemployment insurance).

Hmmmmm, now this could be a problem...

Thanks for that info,

Anybody with any experience here?

Thanks again,

CPO

[CPO]

...

Aha! Found this little nugget on Legal Consumer.com (Texas Bankruptcy Information...on the Means Test Calculator....

(From Congressional Committee Report): "Unemployment compensation is given special treatment. Because the federal government provides funding for state unemployment compensation under the Social Security Act, there may be a dispute about whether unemployment compensation is a "benefit received under the Social Security Act." The forms take no position on the merits of this argument, but give debtors the option of reporting unemployment compensation separately from the CMI calculation. This separate reporting allows parties in interest to determine the materiality of an exclusion of unemployment compensation and to challenge it. " In plain English this means, report it separately. It may not affect the result of the test. If it does, it will be a "material" issue that the debtor may want to assert.)

So, its not included if you don't include it, but affords the opportunity for a creditor and/or Trustee to argue the case for, and for you to argue the case against....

Interesting little grey areas of the law......

Still looking for first hand experience....especially in Texas.

Thanks,

CPO