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Is Social Security Disability Income counted as income in Ch7 Bankruptcy?

Denver, CO |

I have read that social security income is exempt in CO for chapter 7 bankruptcy.

Does that mean when I fill out schedule I (the income stuff) on the bankruptcy petition, I would leave it out and put $0 for income?

Or would I include it as income but then claim it as exempt?

Attorney Answers 3



If you are living strictly on Social Security, it is likely that you can find someone to help you, or represent you for free by googling "legal clinics Denver".

Social security is not considered income for purposes of the means test, form B22. It is considered income for purposes of schedule I.

Exemptions apply to property, not income.

Please do not take the preceding as legal advice. I am not licensed in your state and provide my answer for informational purposes only. I would encourage you to seek an attorney in your state. Good luck!

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Like most things you hear, you are hearing only half of the story.

You are not required to include money you receive from social security (including disability benefits) on the Means Test. (Form 22C)

But you are required to include the money you receive from social security in your budget on Schedule I.

If social security is your only source of income, you may not need to file Bankruptcy, since you could be "judgment proof." You might want to consult with an attorney before deciding to file an unnecessary Bankruptcy case.

Good luck!

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Not "judgment proof", maybe collection proof, but your income will not stop a creditor from getting a judgment if the debt is owed.


The federal "exemption" for social security income protects any benefits due as of the bankruptcy filing date or received but traceable (usually because it has not been commingled with other funds and is in a segregated bank account) from being included in the property of the bankruptcy estate used by the trustee to pay creditors.

Generally, social security income cannot be omitted from the household budget and must be included on schedule I.

Social security income of the debtor (or in a joint case the debtor and the debtor’s spouse) is not included on the means test in considering eligibility for a chapter 7 discharge.

However, at least one of the Colorado bankruptcy judges has decided that social security income of a household member other than the debtor (or in a joint case the debtor and the debtor’s spouse) may be includible on the means test as an "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)." See section 101(10A)(B) of the Bankruptcy Code.

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