QUESTION

Can they take my back pay away if I am in chapter 13 bankruptcy?

Asked on Dec 03rd, 2013 on Bankruptcy - Washington
More details to this question:
Regarding my back pay/social security disability. I am in chapter 13 is the back pay something the court can take?
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4 ANSWERS

Bankruptcy Attorney serving Las Vegas, NV at A Fresh Start
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What does your plan say? And did you disclose and claim this back pay on schedule B and C as exempt.
Answered on Dec 06th, 2013 at 3:39 PM

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Deborah F. Bowinski
If you are in a chapter 13 case then hopefully you have a lawyer. You should be asking your lawyer all your questions about your case. Chapter 13 can be quite complicated and the requirements of your chapter 13 plan will vary from case to case and from one jurisdiction to another. Your lawyer is really the only person who can accurately answer your questions.
Answered on Dec 06th, 2013 at 7:36 AM

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Generally, social security disability is exempt in bankruptcy although you can voluntarily commit it towards your plan payments. If your claim was pending when you filed your case, it should have been disclosed as a potential asset on Schedule B and then exempted on Schedule C. If that has not been done, you should disclose your award to the Chapter 13 trustee and concurrently amend Schedules B and C to report and exempt the claim. Keep in mind that Chapter 13 is voluntary and you can drop out anytime. Therefore, if you disclose your award and the trustee asks for some or all of it, if you choose not to cooperate then you can dismiss your case or possibly convert it to Chapter 7 if you qualify for that type of bankruptcy. But if you amend your schedules, that becomes public information and certain creditors have a right to garnish your benefits, for example student loans and domestic support. If you have debts like that, it is best to get legal advice on how to handle them. If the back pay is not social security, then it is likely to be claimed by the trustee unless you amend your plan to exempt it for some reason. There is some leeway for fluctuations in income in a Chapter 13, however, so for example if it does not increase your annual compensation by more than 10 percent, you might assert that it is not a material difference and the trustee might let you keep it. Nevertheless, full disclosure is required.
Answered on Dec 06th, 2013 at 7:36 AM

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Regulatory Attorney serving Spokane, WA
First, the back benefits may be exempt under Federal exemptions in Washington. Second, if you are in a Chapter 13 and current on your Plan, changes in income shouldn't matter. However you need to talk to your bankruptcy attorney and maybe the Chapter 13 trustee to be sure.
Answered on Dec 06th, 2013 at 7:28 AM

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