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Would my unemployment benefits be considered part of my gross income when taking the Means Test to convert from Chapter 13 to 7?

Belleville, NJ |
Attorney answers 5

Best Answer

The issue regarding Unemployment being considered Current Monthly Income for means test purposes is split in NJ. Based upon your residency in Essex County, your case is a Newark Case. The Newark Chapter 13 Trustee considers unemployment income for means test purposes. The same is not true in the Trenton and Camden Bankruptcy Courts. There is no fee for taking the means test, it is calculated as part of your initial bankruptcy petition filing.

Bruce C. Truesdale


Yes, unemployment counts as income for the means test.


Unless your unemployment benefits are paid from money funneled through the social security administration, unemployment benefits would have to be included in the Means Test. The Means Test isn't like a college test & there is no standard fee. It is typically included in the legal fee to hire an attorney to represent you in a bankruptcy case. Hope this perspective helps!


This is actually a pretty complicated question.

There is a split amongst various Bankruptcy Court as to whether unemployment benefits are "benefits received under the Social Security Act." Most courts have found that even though the Social Security Act is related to unemployment benefits, the benefits are not derived under the Social Security Act and, thus, you have to consider your unemployment benefits when doing your Means Test calculation. This includes a Bankruptcy Court in the Middle District of Pennsylvania, which is in the same Federal Circuit as New Jersey (although that is not binding on your case if you are in New Jersey).

However, a minority of Courts have held that unemployment benefits are benefits received under the Social Security Act and, thus, are not included in the Means Test Calculation. I do not believe any Bankruptcy Courts in the District of New Jersey have decided this question.

You should definitely speak to an experienced bankruptcy attorney to discuss this matter. The case In re Washington, 438 B.R. 348 (M.D. Ala. 2010) analyzes the two different ways of interpreting the law.


I agree with the prior answers in that there is a split regarding unemployment income. However, I am not sure why you would be concerned with not meeting the means test if you are unemployed. I think that at least a consultation with a bankruptcy lawyer would be worthwhile. If you are not working, unless you filed jointly with your spouse and she is working, you should not have enough income for it to make a difference either way.

Disclaimer: The information you obtain at this answer is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation. Review of this answer does not in any way constitute legal representation,

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