My children receive social security benefits. Do I include this as income in my bankruptcy?

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Written by Andrea Wimmer, Esq..  
Updated June 22, 2020

Summary

There are two locations in your bankruptcy forms where income has to be disclosed, the means test and your Schedule I. This article explores whether and when you should include social security benefits your child receives as part of your household income in your bankruptcy forms.

There are two locations in your bankruptcy forms where income has to be disclosed: 

  1. Chapter 7 Statement of Your Monthly Income, Official Form 122-A1 (the Means Test)

  2. Schedule I: Your Income, Official Form 106I

The Means Test

Social security income is never included in the means test calculation of your household income. So, regardless of who receives the social security benefit, do not include it as income on your means test.

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Schedule I

Schedule I provides the court and your trustee with an overview of your income going forward. It’s intended to illustrate your (in)ability to pay for necessities and keep making payments to your creditors going forward. Unlike the means test, the numbers are forward looking and not a historical average. 

If you use a portion (or all) of the social security benefits you receive for a dependent to pay for living expenses, you should include this amount on your Schedule I. It fits best in line 8f - as other government assistance that you regularly receive as you can indicate that the benefit is for your minor child and not yourself. 

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Statement of Financial Affairs

If you don’t use the funds for living expenses at all, putting the full amount in a bank account for your minor child instead, don’t include it as your household income on your Schedule I. After all, it’s not available to pay for household expenses. In that case, make sure that you let the court know whether you’re an authorized user or joint owner of the bank account you’re making the deposits to in response to question 23 on the Statement of Financial Affairs. This will help avoid confusion down the line in case the trustee sees that you’re making deposits into this account from your account. You don't have to list your child's social security income in response to Question 5 (Did you receive any other income during this year or the two previous calendar years?).

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Conclusion

If you use the social security funds your child receives as part of your household budget, make sure you disclose this on your Schedule I. Keep in mind, however, that it’s not part of your household income under the means test calculation and you can never be forced to use it to pay your creditors. 

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About the author

Andrea Wimmer, Esq.

Andrea practiced exclusively as debtors’ counsel in consumer chapter 7 and 13 cases for more than 10 years before joining Upsolve, first as a contributing writer and editor and ultimately joining the team full time in August 2019. While in private practice, Andrea handled all ban... read more

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