Unemployment income and the means test–a lesson

Unemployment income and the means test–a lesson

I’ve written about the means test what types of income ‘count’ for the purposes of determining your household income.

I recently got a call from a prospective client who told me that an associate who works for the law firm who files the most number of bankruptcies in Georgia** told him in his consultation that unemployment income counts on the means test.

Did I agree?


Here’s why: Yes, an on this point came out of the Northern District of Georgia’s bankruptcy court May 12, 2010. The case was a Chapter 13 were the issue to be decided was whether all of the debtors income had been allocated to the Chapter 13 plan. The means test excluded the debtor’s unemployment income on the grounds that it was income derived under the Social Security Act and therefore excluded from the ‘current monthly income’ calculation. The judge ruled in a footnote on the unpublished opinion that he believed that Congress meant to say ‘retirement’ when it wrote that SSA income was excluded from the means test not ‘unemployment.’ (!)

The fact is that whether the means test includes or excludes unemployment compensation is not settled law across the country. Attorneys like me are fighting this battle case by case (until it’s decided by the Supreme Court).

Up till now, we’ve proceeded in Georgia excluding unemployment income from the means test. This decision doesn’t mean that the law is settled, it’s an unpublished opinion that signals to me that at least one judge (a very fair and good judge) believes that it counts.

It also means that if qualifying for Chapter 7 turns on whether your unemployment income is ‘counted’ you had better hire an attorney who will fight for you. Who will take to the mat for you? Who will explain this to you so you know what you’re doing before you do it?

As our unemployment rate doesn’t’ appear to be improving anytime soon, this issue will become important for more and more clients.

You need an advocate who will advocate for you.

Call me, Attorney Shannon McDuffie to arrange your consultation with me in my office.
(404) 418 8879

** See this brief before you sign your name with that firm my friends.