Is Social Security Income Counted in Chapter 7 Bankruptcy Means Test?

If you are ready to take action and get rid of your overwhelming debt by filing for bankruptcy, one of the first steps will be to take the means test. The means test will analyze your income to determine if you qualify for Chapter 7 bankruptcy. However, completing the means test can be a complex process. One of the most common questions that individuals have when completing the means test is whether they should include their social security income.

How Does the Means Test Work?

The means test will help determine if you make more or less than the state’s average income. If you made less than the median income, you will likely qualify for Chapter 7 bankruptcy. However, if you make more than the average income, you may need to file for Chapter 13 bankruptcy instead.

Should I Include My Social Security Income in the Means Test?

No, you are not required to include social security benefits on the bankruptcy means test. Determining whether you’re qualified to receive a debt discharge in Chapter 7 bankruptcy will be based on your employment income alone.

In the means test, you should only disclose the income you receive from all sources during the full-six month period, with a few exceptions (such as the social security benefits). However, you will need to include your social security income in the budget section of your means test.

How Do I Know If I Filled Out the Means Test Correctly?

If you need assistance filling out your means test and understanding what you should include in each section, you need an experienced attorney on your side. Our Los Angeles bankruptcy attorneys at Wadhwani & Shanfeld have helped over 20,000 people achieve debt relief throughout Southern California. We understand the complexities involved in completing the means test and the bankruptcy process. Let our team help you with your case from start to finish.

Contact us today at (800) 996-9932 to schedule a consultation!