Social Security Income and Chapter 13
Today we had a Chapter 13 debtor come in to sign their paperwork to have their Chapter 13 case filed. What is interesting about this case is that both Debtors receive income through the treasury from the railroad. The husband had worked for the railroad for a number of years and now they both receive the retirement income as well as a pension each month. When conducting the means test for the Chapter 13 case, I had questioned if we had to list the railroad retirement since it was coming through the treasury. The bankruptcy attorney at first stated we had to list it in the means test, which made them pay 100% back to their unsecured creditors. After the bankruptcy attorney reviewed the case law, he determined that the railroad retirement fell under the social security act and could not be listed as income. We just hope that the Chapter 13 trustee interprets it the same so that these debtors will be set on their way to a successful bankruptcy.
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