Chapter 7 Filed - Means Test concerning Veterans Disability. We filed for Chapter 7 and are awaiting the creditor meeting.

Asked about 5 years ago - Media, PA

I noticed on the means test, our attorney did not include my Veterans disability. It was included in the petitions but not in the means test. I asked him about it and he said not to worry about it because it doesn't have to be included under Title 38, whatever that is? The means test numbers currently show us at (-$180) The VA disability amount is $243. If this amount is to be included, we are assuming there would be disposable income of $63, assuming all of our expenses are accepted. The question is, are the benefits supposed to be included and if so, does this automatically mean we have to go with Chapter 13. It would seem to us that $63 of disposable income wouldn't even be enough to pay the trustee fee. We're kind of worried; we've been honest with everything, just not sure.

Attorney answers (2)

  1. Shannon Daspit McDuffie

    Contributor Level 8

    2

    Lawyers agree

    2

    Answered . There is actually a test that determines whether or not a disabled veteran is immune from the means test.

    First 'disabled' is defined in 38 U.S.C. § 3741(1)).

    Did the indebtedness occur during the period which the veteran was on active duty? (as defined in 10 U.S.C. §101(d)(1))?
    OR
    Did the indebtedness occur while the veteran was performing homeland defense activity? (as defined in 32 U.S.C. §901(1))?

    If neither applies, I don't think the debtor is immune from the means test.

    When you sign your means test and check that box, you are signing under penalty of perjury that you meet the definition of a disabled veteran. The penalty for perjury is jail time and/or big fat fines. Watch out.

    The question as to whether veterans disability payments 'count' for the purpose of the means test is governed by Congress's treatment and definition of income. Congress excluded payments debtors receive under the Social Security Act, but NOT veterans benefits. So, the short answer is that they do 'count.'

    This is not legal advice, and I am not your attorney. Talk to your attorney to find out if things are in need of amendments.

  2. Bryan Scott Skillman

    Contributor Level 7

    Answered . Good News for You! In 2005, Congress enacted "BAPCPA" for the stated reason that they wanted to cut down on bankruptcy "abuse." The new law added the "Means" test to determine if, based on the prior 6 month average, a debtor might in fact have the means to repay a portion of their debt rather than getting a chapter 7 discharge which permitted a fresh start for all but a few filers. Since its enactment, congress has revised who needs to file the means test portion of the bankruptcy filing. In The New Amended BAPCPA, "Disabled Veterans" are not required to put any information in the B22 at all.
    SO... There is no problem for you and you will be able to remain in the chapter 7 and should be able to receive your chapter 7 discharge.

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